Purchasing
UK Buy To Let property and renting it out to tenants
can be a fantastic financial investment, and many
landlords are able to make money from their property
investment, providing the property does not remain
empty, does not require much renovation or repair
and when tenanted, is occupied by tenants that behave
themselves and pay the rent in full, on time, every
month.
However,
most landlords will face some issues with property
and tenants eventually, and those who rush into
things without doing thorough tenant due diligence
will probably face this sooner rather than later.
There
have been a number of reports in the press of landlords
that have had evicted bad tenants in severe rental
arrears, only to discover that as well as owing
thousands of pounds in unpaid rent, the tenant had
also trashed their property. At the end of a tenancy,
landlords are often be faced with any number of
minor repairs, often caused accidentally through
general lack of care by the tenant, but as recently
reported by the news media there have been a few
extreme cases where tenants have caused thousands
of pounds worth of malicious damage to properties,
costing landlords dearly.
In
a recent newspaper article, one landlord had reportedly
spent months trying to evict bad tenants in rent
arrears from his rental property by himself, instead
of using a specialist eviction service. By the time
the landlord eventually gained possession of the
private sector rental property, it had been severely
damaged. Carpets were pulled up, floorboards removed,
windows smashed, the entire kitchen had been ripped
out, banisters hanging from stairs, paint and obscenities
were splashed across the walls and the toilet was
deliberately blocked.
Incidents
like this are blamed socially on the rising financial
pressures faced by tenants, with stress levels rising
as debts increase. Cash is diverted from essentials
to go towards daily existence and they fall behind
with the rent.
The
landlord is entitled to serve a Section 8
notice, seeking possession of the rental property
once rent arrears reach 8 weeks. The decision
to evict a tenant is not taken lightly as
there are legal costs to be considered but
the action is necessary in order to protect
his business asset. Some tenants do not see
the landlord’s financial needs as their
problem and see the decision to evict as a
personal attack on them, striking back at
the landlord by trashing the property. |
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With
LHA housing benefit cuts due on 1st January 2012,
the pressure for tenants claiming the housing allowance
portion of the new Universal Credit payment is set
to increase further.
We
advise all landlords to carry out the correct tenant
referencing checks and to use a reputable lettings
and property management agent when seeking tenants.
Landlords
who wish to avoid being faced with a hefty financial
outlay having properties repaired after damage has
been caused should consider taking out a comprehensive
landlord insurance policy, where damages can be
taken care of quickly and with minimal stress as
the cost of the repairs are likely to be covered.
When you take out cover, don’t be tempted
to simply go for the cheapest option. Check exactly
what it covers you for. It should cover you for
loss of income from when a tenant stops paying their
rent and also the cost of repairing damage, whether
it is accidental or malicious. Read the small print
before signing up to a policy and check what excess
you’ll have to pay. Landlords insurance is
a necessary expense and a referencing tenants is
vital part of the lettings process, so make sure
your property asset is well protected.
