Taking 6 months rent in advance?

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    Taking 6 months rent in advance?

    I've just had a couple who want to move into my property. I think they seem very suitable. However the lady is self employed and has only been doing the business a couple of months. The man has a new permanent full time job but has only been in the job for a few weeks and before this he was out of work for a couple of months.
    Are they likely to fail to referencing? (Before I pay to have it done!)
    They have also said they have a guarantor OR they can even pay 6 months rent in advance all in one go. They are aged 60+ and sold their house abroad and will use that money to pay the rent in their retirement. They are looking to stay for 5 + years so I'm very keen to take them.

    Would it be better for them to pay monthly with a guarantor & then I can take out rent guarantee insurance (If this can be taken out against the guarantor if they fail the referencing? Not sure how this works?).
    If I take 6 months rent in one go I guess from month 7 they pay monthly, however I guess I might then not be able to take out Rent Guarantee Insurance if they might still not pass the referencing?

    Any opinions greatly appreciated! Many thanks.

    #2
    if the tenant has bad credit then i suggest you look at JOhnson V Old http://www.bailii.org/ew/cases/EWCA/Civ/2013/415.html

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      #3
      I can't imagine that rent guarantee insurance would be available on either of the bases you have described.

      If they have a large lump sum available from which they plan to pay rent which they can prove, given their age, I'd not worry about payment in advance.
      A sixty + year old couple are (usually) the kind of tenants you're looking for.

      A guarantor (particularly a family member) would be a nice to have.
      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).

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        #4
        Originally posted by zhorik View Post
        if the tenant has bad credit then i suggest you look at JOhnson V Old http://www.bailii.org/ew/cases/EWCA/Civ/2013/415.html
        I waded through all that small print, to see the appeal was dismissed! Just take six months up front, for a six month tenancy, then monthly from then on.

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          #5
          Originally posted by JK0 View Post

          I waded through all that small print, to see the appeal was dismissed! Just take six months up front, for a six month tenancy, then monthly from then on.
          Thanks. I did this once before with a tenant. They paid 6 months rent in advance then when it came to month 7 they had run out of money. If I did this again I worry they would then be in my house on month 7, they won't have passed references and I wont have been able to get rent guarantee insurance. So from month 7 it could be a risk? I'm not sure the best route!

          Thanks for the replies.

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            #6
            Originally posted by henderson78 View Post

            Thanks. I did this once before with a tenant. They paid 6 months rent in advance then when it came to month 7 they had run out of money. If I did this again I worry they would then be in my house on month 7, they won't have passed references and I wont have been able to get rent guarantee insurance. So from month 7 it could be a risk? I'm not sure the best route!

            Thanks for the replies.
            I forgot to mention, you send a s21 notice after 4 months together with a standing order form. Then if you don't get rent for month 7, you just apply for a possession order.

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              #7
              It is the usual story. They are low risk if they have cash, but the law turns them into high risk tenants who will have difficulty finding somewhere to stay.

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