If you’re thinking of renting out your property, chances are that well-meaning friends and family have been quick to point out all the things that might go wrong.
Tenants sneaking in six rottweilers, secretly renting out the spare room, or just not paying the rent, are all concerns that might get thrown around when you decide to become a landlord.
But how likely are those events, really?
I’ve taken a look at some of the common myths surrounding letting out your property, and busted them wide open.
1.Lets And Pets
I’ll give you a second to appreciate how great that subheading is.
In 2020, a survey by Statista showed that 41% of UK households were pet owners, with dogs coming out on top as being owned by 23% of households, and cats in second at 16%.
With over 90% of landlords having a blanket ban on their tenants having pets, you can probably guess where I’m going with this.
New rules unveiled by The Ministry of Housing at the beginning of 2021 will stop landlords issuing such a ban without good reason.
Consent for pets is now the default position, and landlords who object will have 28 days to put in writing why they object.
As someone who, in their early 20s was refused a tenancy due to my cat (that slept for 23 hours a day, in contrast to next door’s children whom I could hear trying to come through the walls), let me tell you why it’s a myth that pets and lets don’t mix:
●Pet-friendly properties rent faster - pet-friendly properties receive more applicants than other properties
●Pet Owners Rent For longer - Tenants with pets know it’s harder to find pet-friendly properties and so are more likely to renew their tenancies to avoid having to find another one
●‘Pets Considered’ doesn’t mean you’ll definitely get tenants with pets - it just opens you up to a wider pool of tenants, which can only be a good thing.
2. 6 Months Rent Upfront - Do Or Don’t?
For a lot of landlords, tenants who offer to pay 6 months rent upfront set alarm bells ringing.
They might assume they don’t have good references from previous landlords, or don’t have a good credit rating and are trying to compensate.
However, it could just be that they have savings set aside for this situation and there’s nothing sinister in it at all.
The best way to avoid concerns over potential tenants offering to pay a large sum of rent upfront, is to use an agent to manage your property.
A good letting agent (enter: Stevens!), will always carry out stringent checks on tenants, including credit and employment checks, as well as getting references from any former landlords.
This should eliminate any untoward reasons for tenants offering to pay 6 months, or more, rent upfront.
3.Guarantors - Good Or Bad?
Much like a tenant offering 6 months rent upfront, landlords hear the word ‘guarantor’ and instantly assume there’s a risk that the tenants aren’t going to be good for the rent.
This isn’t always the case.
Of course, for a tenant who perhaps hasn’t been at their current place of employment long, or whose credit history isn’t perfect, a guarantor could be a wise move - even if they are otherwise exemplary (ie: earn a good, regular income and have great references)
But, of course, even a tenant with a perfect credit score, and 20 years of employment history with the same firm can fall on hard times and suddenly find paying rent is a struggle.
A guarantor can work as a ‘back-up’, to cover the rent or any other costs that a tenant might fail to pay - for whatever the reason.
A guarantor will be subject to the same stringent checks as a tenant, to ensure that they are suitable.
4.What If My Tenant Sublets?
Subletting - a tenant letting out your whole property, or part of your property, to someone who isn’t part of the original tenancy agreement - is, to put it as politely as possible, a pain in the proverbial, if done without your knowledge and consent.
The majority of landlords are, for obvious reasons, against subletting.
So, how can you make sure it doesn’t happen?
●Carry out inspections - the most effective way to prevent anything untoward going on, including subletting, is to use an agent to fully manage your property. An agent will carry out regular, routine inspections to ensure that your tenants are sticking to their terms of the tenancy agreement.
●Get friendly with the neighbours- all neighbourhoods have a curtain-twitcher (or four!) who will be ready and willing to grass your tenants up if they’re up to no good! Let them know that the property is rented and who is living there, and make sure they have yours or your agents contact details.
5.What Can I Do If My Tenants Don’t Pay? - I Have A Mortgage To Pay!
Ok, so your tenants have moved in.
They passed all of their checks with flying colours, and they have an equally reliable (on paper) guarantor in place.
But that’s the kicker isn’t it - ‘on paper’. You, or the agents managing your property, can have dotted every ‘i’, crossed every ‘t’, and taken every precaution to ensure that your tenants will keep up their end of the agreement.
But, ‘the best-laid plans’, and all that…
Tenants not paying rent is undoubtedly the biggest concern for UK landlords, and can be stressful and time-consuming at best, or mean you failing to meet your mortgage payments and falling into arrears yourself at worst.
So, what other measures can you take to protect yourself?
●Rent Guarantee Insurance - Rent guarantee insurance covers your monthly rental income if your tenants don’t pay. Usually you can make a claim once your tenants are a month behind with their rent, and then continue to receive payouts for a fixed period - normally between 6 months to a year. Rent guarantee insurance isn’t a legal requirement, but it does offer valuable protection if you rely on your rental income to pay your mortgage.
●Advanced Rent Option - Advanced Rent Option (ARO) is a service that allows a landlord to take their rent a year in advance. ARO is available through your letting agent so long as your tenants have passed all the normal referencing checks. Again, this is an option, not an obligation - but useful if you’re concerned that missed rent payments could lead to you being in arrears yourself.