Our aim here is to identify the 6 worst types of tenants and give some advice on how to avoid the exposure in this market place. The buy to let market is currently on the rebound as there are not enough properties for people to buy that are affordable or they cannot get a mortgage in the first place. In August 2010 the National Landlords Association reported that 43% of landlords in the UK, where owed rent by their tenants, that's 400,000 UK landlords potentially struggling to repay their commercial mortgages. Bad tenants are part of this complex investment strategy, the buy to let market until recently hit the wall, but in recent months landlords are receiving higher rents than before due to the influx of new tenants.
The Socialites: Commonly known as the party animals, these are the most common type of tenant due to the demand for accommodation near universities. These types of tenant are most probably the hardest to identify when meeting with them for the first time, they have no track record in the market place as normally are living at home with mum and dad whilst doing their A levels. You as a landlord are responsible for the levels of noise that this type of tenant could make, so make sure that when you are discussing terms with them they understand that the renewal of the tenancy agreement is dependant on them behaving in an adult like manner whilst staying in your property. Let them know that they will be getting a 6 months tenancy agreement and if they do look after your property you would consider extending for a further period. As they do not have a great track record ask their parents if they would guarantee the rent and damages, as you can do a reference check on them, but trying to do one on the students will be nearly impossible.
The Professional Bad Tenant: Tenants of these types have only emerged recently within the UK, they will move from one property to another to exploit the legal system in this country. The landlord should start to get wary of this situation when these types of tenants fail to pay their rent on time, what they will be trying to do is live in this property for say a period of 3 months or more then look at moving onto another property in the meantime. The one thing they will try and do is strip the property bare, by removing things like, radiators, carpets, floorboards and even kitchens. By the time the landlord has a chance to visit the property these type of tenant have fled the scene. So what does this mean to the landlord? Well he can look at taking them to get and getting a County Court Judgement (CCJ) put against them, but the chances are they will not get anything back as they do not have any money, so the landlord has to way up whether or not he wishes to pursue this course of action, if he does not then these types of tenant walk away scot free with no black mark against them. The landlord should use a management company to get references on these tenants for a small fee; the tenants would not normally be allowed to move into the property until all references are checked.
The Late Payers: Landlords hate this term because it will put them in jeopardy of losing their property unless they have sufficient capital in the background. Tenants of this type can be the most difficult to pay on time, they come up with excuse after excuse, now there could be a legitimate reason for a one off missed payment but the landlord will have to keep an eye on this situation as before he knows it 6 months could have passed and it could take time to evict these tenants. Landlords have to put there case before the courts for them to make a ruling on an eviction notice.
The animal lovers: In August 2010 ITV's Tonight programme exposed the worst tenants, and from this programme landlords are becoming increasingly more wary of renting their properties out to tenants with pets. This programme exposed a tenant that had racing pigeons as pets in the landlords home, by the time the landlord had got around to inspect his property the tenant had fled and left pigeon faeces and feathers all over the property, at his own cost he has had to get a professional cleaning company. This shows that landlords are airing caution on tenants that have pets. What will stop a tenant from brining a pet into the home once they have moved in? Nothing really, but the landlord can arrange to visit the property a certain times throughout the year, this can be done through the management company or the landlord direct, but the tenant does have to be informed of when the visit is likely to take place. There will always be signs of pets in and around the home, from faeces in the garden, pet food wrappers in the bins, the smell within the house, just be aware.
The extended family: This happens when a potential tenant arranges to meet with the landlord either on their own or with their partner, the landlord is happy with the arrangement he has made with them and all the due diligence is done. All of a sudden neighbours in the surrounding area notice different people entering the property but not leaving, their cars are parked on the drive overnight for example. You as the landlord start to get the jitters as something is not quite right, what emerges from this is that you have done you own research and you have found out that the tenant has allowed family and friends to stay at the property, which as a result your property is starting to show signs of more than normal wear and tear.
The bureaucrats: Landlord has met with the potential new tenants of the property they seem very enthusiastic about how they will look after the property to avoid any unnecessary costs they will be charged when they leave. However all tenants will expect to receive their full deposit back from the Deposit Protection Service when they leave as they thought the property was in better shape than when they took it over. This can cause unnecessary trouble unless both parties agree to a tenancy agreement and an inventory check list, this will ensure that both parties are legally covered and will put you on the right footing when you decide to leave.
How to avoid the nightmare tenant? Here is some great advice to follow, when looking to rent out to a potential new tenant. Make sure that you meet prospective new tenant at their existing property, this will give you piece of mind if the property they are currently renting or selling is of a high standard within. Make some mental notes of what they are saying to you about their lifestyle, it may be that they have young children, so they would be more mature status, it may be that they enjoy going out a lot, i.e. nightclubs etc, would you want this sort of tenant? Ensure you get details of their employment and existing landlord; they may have just sold a property and are moving into rented accommodation until the market picks up, do not let them move into your property until all the references are back and you are happy with them, it maybe that they do not have a credit rating as they do not have any credit on file, so ask for a guarantor, at least the rent will be guaranteed to be paid and the last thing on the list is go and get some form of rental insurance policy just in case.
Here is some important contact information that may also be of use:Landlord Action - This is a UK based organization which is designed to help property professionals and landlords deal with problem tenants.The Rent Assessment Committee (RAC) - An independent legal body that offers ways of settling rent disputes without going to courtLandlord Accreditation Schemes - Voluntary schemes which are designed to help landlord to operate a successful business, provide tenants with safer, higher-quality accommodation and reduce the need for intervention from local authorities.
All professional landlords will know that during the course of letting out their property, there will be some form of natural wear and tear, always keep and up to date inventory, you will be able from that point on establish basic wear and tear to more serious damage. Finally and most importantly keep in regular contact with the management company who let and manage the property for you as these are your backbone in this advancing market place.