First time landlord need an extra pair of eyes or some advice please!

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    First time landlord need an extra pair of eyes or some advice please!

    Hi all!

    First time posting here please be gentle with me!

    I'm a first time landlord trying to do it myself. I have done quite some research about the landlord responsbility and legal stuff and am aware of the basic procedures of tenant vetting, agreement signing, gas safety & EPC, inventory, and deposit scheme etc.

    Now that I have found this propsective tenant who I quite like and am happy to rent my house to her based on the face value information she provided. We are about to do the credit check and referencing stuff this week. I just need an extra pair of eyes that there is no any dodgy things that I need to be aware of?

    The lady is getting divorced and selling her own house. So she never rented before. She said she will get some equity from sale of her house but is planning to rent forever (why?). She works full time and permantly but her salary isn't much - she cannot afford my house based on just her salary but she gets £1300 per month maintenance from the divorce plus other income - child benefit + working tax credit, her total take home income is around £2500 per month (with this she can afford the house). She has two teenage daughters, one is 17, one is 15 (I suppose her maintenance will go down once one daughter hits 18? And if both daughters are over 18, then no maintenance fee any more? Do I need to ask her about this?)

    One other thing is she asks to pay rent every 6 months in advance in order to secure long-term rental of my house. As much as I love to have large rent paid in advance, I have seen people saying that some people trying to empty their bank in order to claim housing benefit? Also if she pays every 6 months, does that mean that the notice has to be 6 months as well if either side wishes to end the tenancy? Or is there anything like she pays every 6 months, but only 2 or 1 month notice is required if both party agrees and specified in the AST? If this is not feasible, shall I accept her proposal of paying every 6 months or shall I insist on monthly payment to have more security on letting her go at the end of the tenancy (12 months) if she turns out not to be as good as she claims as tenant?

    She also has a dog which I don't have a major problem with as we don't intend to go back to that house and look to rent it out long term as long as tenants are good.

    So please, experienced landlords, do all these sound good and she's the perfect tenant that I'm dreaming to have? Is there anything else that I should know or be aware of? Any potential pitfalls? I know that we can't predict the future, but trying my best to minimise the risk.....

    Thank you very much for your opinions and/or advice!

    #2
    Originally posted by NeverSayNever View Post
    Hi all!
    (I suppose her maintenance will go down once one daughter hits 18? And if both daughters are over 18, then no maintenance fee any more? Do I need to ask her about this?)

    Thank you very much for your opinions and/or advice!
    Cant help with much more than the maintenance. That is paid up to age 19 if the kids are in full time education

    Comment


      #3
      I know one shouldn't start a sentence with a question but how much is the monthly rent?

      In an ideal world a tenant should earn around 30 times the monthly rent; i.e. £1000 per month would require a £30k pa salary. That takes into account things like council tax, average utility bills etc. Do the math and see if she falls far short of it; personally I wouldn't take anyone who was much below that figure. What happens to her ability to pay the rent when the child benefit/working tax credit stops?

      How big is the house? if she has to go onto benefits will she get the full rent valuation; one adult and two teenagers would only warrant a large 2 bed or small 3 bed in most areas and the rent allowance would be made accordingly.

      Maintenance is usually paid until the child is 18 or leaves full time education - or until the other half gets fed up/remarried/made redundant/or just plain nasty. Can she afford the rent without this coming in?

      There is a danger of making it into a 6 month notice period by taking 6 months rent in advance, you need to be careful about how the tenancy is worded and make sure it never falls in a periodic.

      Dogs may not be a problem for you, or this tenant, but what about your next tenants? Dogs usually leave doggy smells, eradicating that is difficult at times so take a larger deposit and ensure the specific cleaning required after a pet is covered in the tenancy; removing dogs hairs, steam clean carpets, spray for possible flea infestation etc. Have a clause that allows you to ask her to remove the dog if it becomes a problem.

      Perhaps a guarantor would be a good idea if she is low on income - not the ex husband though - is there a parent who would stand for her? I think its always a true test of a tenant's lifestyle, to see if a family member would trust them enough to offer to pick up the tab if it goes wrong.

      good luck
      My advice is not based on formal legal training but experience gained in 20+ years in the letting industry.

      Comment


        #4
        Originally posted by oaktree View Post

        Maintenance is usually paid until the child is 18 or leaves full time education - or until the other half gets fed up/remarried/made redundant/or just plain nasty. Can she afford the rent without this coming in?
        good luck
        getting fed up or remarried doesnt make the maintenance go down. Depends if its spousal maintenance??

        Comment


          #5
          With any new tenant who claims they want a very long term arrangement, I would always insist nonetheless on a 6 month intitial AST, just to ensure both parties are happy with each other. Tell her this is for her benefit as much as for yours.
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

          Comment


            #6
            Originally posted by stockport1965 View Post
            Cant help with much more than the maintenance. That is paid up to age 19 if the kids are in full time education
            Thanks for the reply. So I guess at least for the first couple of years she'll be fine then.

            Comment


              #7
              Originally posted by stockport1965 View Post
              getting fed up or remarried doesnt make the maintenance go down. Depends if its spousal maintenance??
              Is spousal maintenance forever? Why would someone pay spousal maintenance if they split up? I monre intend to believe they are just child maintenance.... (sorry, never being through divorce... not sure how these things work....)

              Comment


                #8
                Originally posted by oaktree View Post
                I know one shouldn't start a sentence with a question but how much is the monthly rent?

                In an ideal world a tenant should earn around 30 times the monthly rent; i.e. £1000 per month would require a £30k pa salary. What happens to her ability to pay the rent when the child benefit/working tax credit stops?

                How big is the house? There is a danger of making it into a 6 month notice period by taking 6 months rent in advance, you need to be careful about how the tenancy is worded and make sure it never falls in a periodic.

                Perhaps a guarantor would be a good idea if she is low on income -
                good luck
                Thanks very much oaktree for your reply! The house is a very good size 4bed terraced house, and the rent is £900 per month. She makes £15k per annum, gives her just around £1000 take home income without any supplementry incomes. Child and working tax credit would bring her income up to £1500 per month... which would be just about enough to pay everything. She was happy to rent my house as she believes the equity (£40K) she gets from the sale of her house should see her through quite a long time if the supplementry income stops. But I think I can double check that with her.

                I'm happy to do the professional cleaning if she leaves the property so I'm not too fussed about the dog. I think I'll suggest her to make mutual agreement on notice time of 1 or 2 months rather than 6 months and make sure that's written down in the tenancy agreement.

                I think the idea of asking for a guarantor is good however I feel awkward to do that as she's not a young teenage mummy but a very mature grown-up...I believe even her parents would already be pensioners for a long time... is it effective to ask pensioners be guarantors?

                Many thanks indeed!

                Comment


                  #9
                  You are a new landlord and you have to take a different mind set. Renting a property is a business. If your tenant suddenly can't pay the rent, it takes a long time to get them out and costs lots of money.

                  You should be asking for a guarantor - ie, parents who are home-owners. You should not feel awkward about asking - this is your business. If you still feel awkward about asking, employ an agent to do it for you.

                  Comment


                    #10
                    Originally posted by NeverSayNever View Post
                    Is spousal maintenance forever? Why would someone pay spousal maintenance if they split up? I monre intend to believe they are just child maintenance.... (sorry, never being through divorce... not sure how these things work....)
                    Spousal is paid until they remarry. They can cohabit and still not lose it.

                    Comment


                      #11
                      Originally posted by stockport1965 View Post
                      getting fed up or remarried doesnt make the maintenance go down. Depends if its spousal maintenance??
                      Originally posted by NeverSayNever View Post
                      Is spousal maintenance forever? Why would someone pay spousal maintenance if they split up? I monre intend to believe they are just child maintenance.... (sorry, never being through divorce... not sure how these things work....)
                      Apologies for any confusion, I didn't mean the maintenance amount would be affected, I was mereally playing devils advocate and looking at reasons why the ex may stop paying altogether! Its all very well having a maintenance agreement in place, but if the paying party decides to stop paying it is a long and brutal road to get them into court to enforce payment. In landlord terms I wouldn't take it into account for a tenants income.

                      Lets look at worst case scenario - she brings in £100 more than the rent. She then has an additional £500 in working tax credits and child benefit which you say will pay everything else. I assume you mean council tax, gas, electricity and water. Doesn't leave a lot for food or house running costs if the ex stops paying does it?
                      My advice is not based on formal legal training but experience gained in 20+ years in the letting industry.

                      Comment


                        #12
                        Is your house ready to be let?
                        Has she actually sold her house?
                        Allow tenants to protect their own deposits. I want free money when they do it wrong

                        Comment


                          #13
                          Originally posted by oaktree View Post

                          Lets look at worst case scenario - she brings in £100 more than the rent. She then has an additional £500 in working tax credits and child benefit which you say will pay everything else. I assume you mean council tax, gas, electricity and water. Doesn't leave a lot for food or house running costs if the ex stops paying does it?

                          Hi oaktree, thanks for replying again. You're absolutely right, she'll be comfortable with the maintenance but will struggle without it. I'm hoping her house sale equity will help her a bit. When you say you wouldn't consider it as part of income, would you say that credit check and affordability assessment wouldn't not take that into consideration too? I'm waiting for her cheque to clear before starting the checking and referencing work, now I'm worried she wouldn't even pass it. I do quite like her and I don't want my house to sit there empty for too long. What is the best way of doing this one? I think I'll do the below, but anything else would you suggest?
                          1. 6months rent in advance but agree on 1-2months notice period
                          2. Ask for a guarantor

                          Comment

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