New tenant advice

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    New tenant advice

    Hi all,

    Just after some opinions on tenants. I amlooking for new tenants. My current tenants are still within 6 month contract but wish to leave. I’ve agreed that they can leave early if I find suitable tenants. I have just referenced a couple but I’m thinking of declining their application. They have both failed the referencing based on financial. The lady is self employed (runs 2 pubs) but has been working for herself for less than 1 year so doesn’t have a tax return yet. Therefore the reference agency have said they cannot confirm income. The man has also failed for the full rental amount of £695 and they have assessed him as being able to afford £380.

    The lady did tell me that she would fail but not the partner so that was a bit of a surprise. And so she has given her mother as a guarantor who has passed. She is a retired headteacher with pension income confirmed as £30k and owns her own house with no mortgage. She has come back as being medium risk, I think because she is retired. Openrent have said I’m eligible for rent guarantee insurance as the guarantor is suitable.

    My question is really whether rental guarantee insurance is any good and what you would do in this situation. I’m probably going to decline the application but always good to get opinions of those more experienced than myself. I’m not in a rush as current tenants have until end of March on their contract.

    Thanks

    #2
    Simple really. If you need rent guarantee insurance to make you feel happy about taking a tenant, don't take the tenant. If you feel even the slightest bit uneasy about a tenant, don't take the tenant.

    Comment


      #3
      If you have doubts then don't do it.

      I would be asking myself why they are not living above one of the 2 pubs she is running?
      Although if they are brewery owned the rent to live there could be extortionate.

      I do know 3 licencees who who don't live above their respective pubs, but that's because they already have homes elsewhere.
      2 are free houses and let out the pub accommodation on a daily/weekly basis to contract workers. (There's a lot of contractors round here).
      The other, brewery owned, just sits empty upstairs.

      Comment


        #4
        She is currently living above one of them. But has a 1 year old and wants a separate environment for the child. She has said she’s employing managers to run the pubs in the new year so she can spend time with the baby as she has worked solid through the child’s first year.

        Comment


          #5
          Originally posted by hariba View Post
          She is currently living above one of them. But has a 1 year old and wants a separate environment for the child. She has said she’s employing managers to run the pubs in the new year so she can spend time with the baby as she has worked solid through the child’s first year.
          She took on the running of 2 pubs and had a baby all in the last year? Is she superwoman?

          And she will now use the income from the pubs to pay managers to manage them for her. So what's left for her to be able to pay the rent?

          The more you describe about this situation, the more question marks seem to be created!

          in your first paragraph, you said:
          I’ve agreed that they can leave early if I find suitable tenants.

          Do you consider these suitable???

          Comment


            #6
            Originally posted by hariba View Post
            They have both failed the referencing based on financial.
            It never ceases to amaze me why people bother doing referencing if they don't use the information they get from it.

            If they failed referencing and you are still thinking of taking them on, why did you bother paying for referencing in the first place?

            What if everyone here said, "Go for it!"? Would you take them on and then suffer the consequences? Who would you run to for help when it all goes pear shaped then?

            I honestly think you should consider doing something else with your property. Letting is not for you it seems.

            Comment


              #7
              tatemono,

              I don’t think there’s any need for that. I have asked for opinions as I value the advice and experience of people on this site. Just because someone is self employed does not always mean they are risky and there may have been advice on here that is helpful. And no of course I wouldn’t take them based on everyone on here saying ‘go for it’. I find your comment quite rude.

              As for references.... it seems that the reference company have been quite slack. As they have jumped to failing her based on her not having a tax return instead of asking for other evidence of income. She has easily provided me with bank statements and an employer reference - which the agency have clearly not bothered with. This proves that her income is quite a good one.

              Comment


                #8
                It's a business decision.

                You're handing over control of a valuable asset to someone, who you are relying on to pay you rent and behave in a sensible manner.
                References are helpful, but not definitive (and can only report the past).

                Your gut feeling is also important.
                But it relies on your own experience, my gut has been wrong a few times and I am less trusting than I used to be.
                But I don't simply ignore it.

                There's a lot to be said for an employed tenant with a child.
                They're unlikely to want to move too frequently and there's a shared interest in keeping the place safe and clean.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  Originally posted by hariba View Post
                  I have asked for opinions as I value the advice and experience of people on this site.
                  well, you asked and I provided an opinion and I assume that you value equally the advice and experience of all of us.

                  Tax returns aren't the be all and end all, and in many ways, the bank statements provide more detail, certainly of disposable income. I was self-employed for many years and income varied wildly sometimes for reasons that were often beyond my control. I would imagine that this lady would be in a similar position. That's a risk you take.

                  The referencing agency is telling you not to rent to this person, and you are saying that financially it makes sense. The language you use ("quite slack", "jumped to", "clearly not bothered") shows that you regard their findings as next to useless even though you asked them to do a standard reference.

                  In this case, it seems you have already made up your mind that they meet your criteria. Go for it.

                  Comment

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