Letting to self employed tenant with possible financial issues & lodger

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Letting to self employed tenant with possible financial issues & lodger

    I have a prospective tenant who is very keen move into my property as soon as it's available. He is self employed and due to some financial problems in the slow economy he has sold his house to pay off his mortgage and wants to rent as it's cheaper. That's fine, I know the guy is hard working and he has done some fencing + gardening work for us in the past (very satisfied with his work.) However, it now seems he would like to bring a lodger, and he has said that work is really slow at the moment. I only just found out about this despite knowing of his interest in my property for months. Slightly worrying that he wasn't more up front about this sooner, though I guess the "slow work" comment could just be a tactic to persuade us to lower the rent.

    I was planning to insist on 6 weeks deposit (rather than 1 month) and I'm considering asking 2-3 months rent in advance as well. Would this be outrageous or a sensible way to mitigate our losses should the guy run into serious financial problems?

    Also, are there any negatives for the landlord in allowing the tenant a lodger?

    #2
    Originally posted by IanM View Post
    I was planning to insist on 6 weeks deposit (rather than 1 month) and I'm considering asking 2-3 months rent in advance as well. Would this be outrageous or a sensible way to mitigate our losses should the guy run into serious financial problems?
    6 weeks deposit is fine. But if you ask for two months rent in advance as well, then you can't demand more rent until the third month is due. Otherwise the advance rent could be regarded as money held for security and should be protected just the same as the deposit.

    Also, are there any negatives for the landlord in allowing the tenant a lodger?
    Well, if lodger moved out then T might struggle to pay the rent till he found a replacement. The rent would be more secure, IMO, if it were a joint tenancy with someone who is has a regular job, then you'd have two people responsible for the rent. Alternatively, ask self-employed T to provide a guarantor for the rent.

    Don't you have any other prospective tenants? This one sounds less than ideal - work slow, financial problems, and can't actually afford the whole rent. Best way to protect against potential losses is to find someone who can afford the rent, in a secure job, with good references.

    Comment


      #3
      Originally posted by westminster View Post
      advance rent could be regarded as money held for security
      Thanks, I did wonder if there would be any real advantage. Will drop that idea

      Originally posted by westminster View Post
      Don't you have any other prospective tenants? This one sounds less than ideal - work slow, financial problems, and can't actually afford the whole rent.
      No other firm interest yet, a couple of the neighbours have said friends/colleagues are interested and have passed on our contact details. The agent is very keen to advertise the property again as they think the market has picked up quite a bit, and we do have 8-10 weeks to find a tenant so there is time to find an alternative.

      I need to speak to the self employed guy personally about this, but if I didn't know anything about him I would almost certainly say no thanks. As it is, I do know he took long hours of shift work to pay his mortgage and is the sort to take any work he can get, he seems to be doing the right thing to live within his means. I'll see if he can provide a guarantor and if he really does need a lodger I'm not comfortable with it so would rather do it as a joint tenancy.

      Comment


        #4
        Originally posted by IanM View Post
        No other firm interest yet, a couple of the neighbours have said friends/colleagues are interested and have passed on our contact details. The agent is very keen to advertise the property again as they think the market has picked up quite a bit, and we do have 8-10 weeks to find a tenant so there is time to find an alternative.
        I'd definitely advertise the property. You need to look at all your options.

        I need to speak to the self employed guy personally about this, but if I didn't know anything about him I would almost certainly say no thanks. As it is, I do know he took long hours of shift work to pay his mortgage and is the sort to take any work he can get, he seems to be doing the right thing to live within his means. I'll see if he can provide a guarantor and if he really does need a lodger I'm not comfortable with it so would rather do it as a joint tenancy.
        I appreciate you know this guy is honest and hardworking. That's a big plus, obviously. But there are downsides with renting to people you know - if this guy ended up with arrears I bet you'd be more forgiving than with a T you didn't know, slower to evict, and more reluctant to pursue for the debt.

        It's also possible that he might turn out to be less 'nice' once he has the tenancy. Becoming your tenant could well alter the dynamics of your currently friendly acquaintanceship; for example, he might turn out to be the type who complains about everything, or you might resent him when he's late with the rent, or if he suddenly acquires a huge dog which chews all the furniture.

        Or it might all be fine - my boyfriend rents to a work acquaintance and his girlfriend and so far, so good - but in this case the tenants have never been late with the rent and also both had good references/steady job.

        Just saying, the professional thing to do is to treat this guy the same as any other prospective tenant. Some of it is down to instinct (so trust the fact that this guy is an honest character) but a lot of it is down to being able to afford the rent.

        Comment

        Latest Activity

        Collapse

        Working...
        X