Advice for new landlord

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    Advice for new landlord

    Hi all

    My wife and I are accidental (potential) landlords, having been unable to sell our old home, we have decided to rent it for perhaps a couple of years until the Covid crisis is over and market conditions improve. We have already moved into our new home.

    We are using a letting agent locally who seem very professional and charge a finders fee/ background checks and compliance checks for 10% of the first 6 months rent we will self manage.

    Firstly, do the agent terms sound ok? If not what should we expect to pay.

    Secondly, we have had interest through this agent of a couple with a child. They live abroad and have not lived in the UK for 8 years, so say they won't credit search in the UK. They say they own some rental properties in the UK, so understand issues landlords face. In addition to the rental properties they own an unencumbered property abroad and run a financial services business. They plan to move back to the UK and eventually buy. They report 2 previous credit card defaults which they say are down to fraud and not their fault. They have provided the most recent company accounts drawn up by their accountant.

    Because of the poor credit file they have offered to pay 12 months rent in advance.

    Does this sound reasonable to accept, or should we reject on basis of poor credit? Does the fact that they will pay 12 months in advance eliminate the risk to us?

    Sorry if this sounds quite basic but we have no prior experience of renting out a property and so are quite cautious. Obviously these potential tenants can't currently move because of the Covid situation but have virtually viewed our house and are keen and have completed an application form and want to move as soon as they can.


    Many thanks for your thoughts.


    #2
    So you just "accidentally" signed all that paperwork without realising what you were doing?

    They sound a nightmare, deeply unconvincing story, avoid. Get boring employed credit-checkable people.

    You could string them along, asking for addresses of the rental properties, spend £3 on each with land registry & see if the "story" is true. But even that won;t tell you if they've got real equity in the places.. (unless no charges..)
    https://www.gov.uk/search-property-i...-land-registry
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Originally posted by Newbie6 View Post
      [INDENT]They say they own some rental properties in the UK,
      Why aren't they moving into one of those then?

      Any bets that they have no intention whatsoever of moving to the UK and are in fact renting them (from someone like yourselves), and then sub-letting and taking a skim off the top? (And not paying UK tax, etc.).

      Wanting to pay 12 months up front can be a sign of something very dodgy going on.

      With that extremely suspicious story I wouldn't touch them with a ten foot pole.

      Comment


        #4
        With all the regulation that residential lettings now has, it is no place for untrained landlords, whether or not they use an agent.

        As a minimum you need to join a landlord organisation that has good on-line training and resources.

        Comment


          #5
          You should be 100% confident in who you rent to and, if you have any doubts, I would say no.

          First of all, the agent's terms sound pretty standard, but you should be very wary of any arrangement where an agent finds a tenant but you manage the relationship and the property.
          Your incentives and the agent's are not aligned.
          You want a great, steady rent paying tenant for a couple of years.
          The agent wants someone you'll allow to move in.

          Secondly, who's idea is a 12 month tenancy.
          6 months is more sensible, particularly when you have never met the prospective tenants.

          Paying rent up front does mitigate some of the risk, and is quite common when renting to people from abroad with no credit history.

          Owning up about the credit card defaults when they didn't have to is another plus point.

          It may be that you might want to start off with someone in less complex circumstances.
          And it may be that your wish to rent to people for a couple of years means that you should make that clear - people with school age children would see that as a negative and would be unhappy if you ask them to leave in a couple of years.

          And, please don't consider yourselves accidental landlords (although I know it's a common phrase).
          You're about to start a small business with quite a lot of risk and a lot of money at stake.
          You wouldn't accidentally open a business renting cars.
          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


            #6
            When there is a ''' story to tell '' my first thoughts are to run for the hills, as stated i tend to go for very boring, employed, credit checked and solvent (easily checked solvent) tenants. It all sounds too wild and fantastic and as such i would say not a chance would i rent to them, give them the bad news and move on.

            Comment


              #7
              Oops, there's a silly. I've become an "accidental landlord". If I hear someone say that again this month, I'm going to scream!

              OP, you can sell your house for the *Market Value*. There are houses which have been on the market in my area for over a year because the sellers want a price which is NOT *Market Value*. You price accordingly and you will sell (the next day if it's cheap enough) - at ANY time.

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                #8
                I have to agree 100% with John Duff....... there is no reason to become a landlord if you don't want too.

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                  #9
                  I wouldn't touch them. Really unbelievable story with a dodgy credit rating. No way.

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                    #10
                    Just sell it

                    Comment


                      #11
                      Look at them on social media, Linkdin and any other thing on the net where their names turn up.

                      8 years out of the UK may make them incompatible with tenant referencing. Tell the agent you want to see all refs - if he can get any done.
                      Agree with Hudson on 'story to tell'. My advice is sell it.



                      Freedom at the point of zero............

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                        #12
                        If they've really got 12 months rent to hand then they sound pretty solvent. Take the money and worry about it in 12 months time. (as long as they are not paying by western union from an auntie who is a princess in Nigeria)

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                          #13
                          I wouldn’t even consider going into this market now. It is a minefield you will dread the phone ringing with problems. Believe me the place will never be your own again. Once you have tenants you lose just about any rights you believe you have in “owning” the property. You will end up paying for someone to live there. Get out now!!

                          Comment


                            #14
                            Thanks for the comments and advice. I use the term 'accidental landlord', but as you say perhaps this is not accurate, I have weighed up selling in the current market vs holding for a couple of years and then selling and I have come to the conclusion that the second is probably better for us. I think I will wait for a more straightforward tenant (if such a person exists!). I have decided to ask the agent to manage as well as find a tenant. In the meantime I will keep the house on the market in case someone is interested and willing to pay near the guide price, but I would rather hold on than sell with a 5 - 10% drop in market value due to Covid-19.

                            Comment


                              #15
                              When I decided to invest, in a BTL 5 years ago, I did quite a bit of research added to my own experience of renting a flat for use midweek due to working away from home, and my kids experience of renting shared student houses. I didn't join a land Lord association, but by the time i was ready to invest I had a fair knowledge, but was still.a touch nieve. I have been lucky.
                              Becuase of a conversation with my nephew who is an estate agent and had working on the lettings side, I knew that I was as qualified as an agent, but also that their business model.was to cream as much money off me and the tenant as possible, and that any mistakes they made would cost me.
                              So I decided to do it without an agent.
                              I have been lucky.
                              I know what mistakes I got away with on the first tenancy.
                              If you do decide to rent, do your research, but also do a risk assessment on each potential tenant. You want a civil.servant, or social worker, with good credit and rental history. Who isnt ready to buy.

                              Comment

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