Letting to retired tenant

[twmgnt]

hi, I am new to the forum, and wanted to see if I can get some advice (thanks in advance) on letting to a retired person. If I paint a scenario.. what if there was a prospective tenant who was retired (but not yet a pensioner), and as such I would imagine it would not be possible to perform an employment check. The tenant offers 6 months rent in advance. I would be interested to know how to do a check, should the rent be taken in advance, or should another route be taken such as, for example, asking for a third person guarantee. Also, does this could a problem with buildings insurance? any feedback much appreciated thanks

[ash72]

I don't understand when you say he is retired but doesn't get a pension, it's that an unemployed person? If you perform a check it's most likely going to fail. You most certainly will need a guarantor. Question you need to ask yourself, what happens when the tenant can't pay you the rent?

Concerning the building insurance, it depends on what type of policy you have, if it's a landlords insurance, most likely it will not be valid, but you need to read the terms of any restrictions on they types of tenants they will allow.

[boletus]

What is their source of income?

[leaseholder64]

These days even private pensions are just a special type of tax advantageous saving scheme. (In fact, I believe many landlords consider their property part of their pension arrangements, even though they are not eligible for the tax advantages of a pension. If you have savings in less tax efficient arrangements, it is likely to be more efficient to run those down before relying on a formal pension.

Someone with a lot of savings may be able to afford to retire before they are allowed to use their pension funds.

Also, when relying on a formal pension fund, it can be better to draw down capital from the fund, than take out an annuity, especially in the earlier years.

The balance of pension funds, not converted into annuities, can be left as inheritances, so people who take annuities, may set the level based on their actual spending, rather than on the disposable income assumptions built into rental calculations.

A lot of people in these situations will be or become owner occupiers, but the landlords here are always pointing out that there is a flexibility advantage in renting.

[jpkeates]

Retired people make good tenants.
However, a lot of their good features arise from the pension and other benefits available to them.

Retired but not a pensioner would need to be able to prove how they proposed to pay the rent, just like anyone else.
I'm retired but not a pensioner!

[theartfullodger]

"Not a pensioner" presumably meaning under 65 so not getting state pension? I took at least one of my private pensions early (ex-wife issues, ...) so he may well have private pensions.

In the case (and most others...) I'd ask to see copies of last three month's main bank account and see what incoming £££ there is..- which would show pension payments. He also may be getting various benefits.. And ask him to put in writing how he will be paying rent & from what sources.

More and more older people will be wanting to rent privately given the bonkers state of housing provision: And will likely understand more than most why not paying rent & becoming homeless is not wise.. . Old people aren't all bad! (I'm an exception, 71, in receipt of 6 benefits, defo bad...)

[AndrewDod]

How much do they have in the bank?

Choosing tenants wisely relies on wise assessment of all information (of which the above is key) - not "employment checks". Actual income is always less important (disposable income and savings depends on how much one smokes, drinks, eats out, takes drugs, cooks and invests well - lots of folk have great monthly income but are actually extremely poor - because they are either stupid or have other obligations).

Someone who earns £50K per year and has been doing so for many years, but does not have at least £200K of liquid savings in the bank has a problem with how they use their money.

[twmgnt]

Thanks all for the feedback. I imagine the person would be retired.. unemployed. My agent would be checking how the person can pay ie what funds and income the person has. I cant see how the insurer would have a problem as this is buildings only, not contents. thanks again for the help.

[mariner]

An individual can take a reduced Private pension at age 55, but not State Pension.

[jpkeates]

An individual can take a reduced Private pension at age 55, but not State Pension.

I wish!

They can take 25% of their pension pot out tax free at 55.

[leaseholder64]

The 55 limit is not just for the tax free element. You can convert to an annuity, or take out taxable amounts, as well. (You can take out taxable amounts earlier,but the tax rate is very high.)

There used to be certain occupations with much lower limits, but I think that has ended. The limit can be lower if you have severe health problems.

[DPT57]

The 55 limit is not just for the tax free element. You can convert to an annuity, or take out taxable amounts, as well. (You can take out taxable amounts earlier,but the tax rate is very high.)

There used to be certain occupations with much lower limits, but I think that has ended. The limit can be lower if you have severe health problems.

Correct. I took my private pension at 56, taking the 25% lump sum and buying an annuity with the rest.

[Raiden328i]

Check them thoroughly and get references. If you've seen my thread on my nightmare it would put you off OAP's for life!!!!

He'd been retired a couple years and had worked for TFL and had a nice private pension and 30k in the bank. First couple years he was fine (tho a strange man) but got hooked on heroin by the local skag heads. Now I think of it when I asked for a reference he said I can't give you one but I have money I should of said no but I said to myself what harm can this old man do. The skag heads have burned through his money and i've recently found out something very disturbing about him and that's why his kids have nothing to do with him.

The locksmith I used said to me whenever he goes to repossessions OAP's are the worst when bailiffs turn up. So yes me personally I would think twice next time. When doing viewings after the property went back on the market I had an old lady turn up and in the end I said no due to no references and her daughter saying this flat is handy having the LL next door to fix problems and help with the shopping and bins. I thought you can jog on if you think i'm being a carer

[ExpertInAField]

It's going to be interesting as when time goes on there's going to be more and more pensioners looking to rent. Although organisations like Age UK have several properties for elderly people, their amount is limited and it will come down to the PRS to house these people in years to come.

We are going to have to come up with a whole new set of procedures for dealing with them as they wont have the income that a regular working age person will have.

[leaseholder64]

I would have thought that Age UK were newcomers, and I can't even find any mention of them as a provider on their site. A lot of retirement flats are rented, but by housing associations and any private landlords will typically be larger ones.