Six Nightmare Tenants To Look Out For

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Published: 26th January 2011
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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: Recently there has been a documentary on TV that exposed the worst tenants; Landlords have become more reluctant to renting their properties out to tenants with pets. The documentary showed a tenant that kept racing pigeons as pets in the landlord's property, when the landlord went round to his property he found it abandoned and full of bird faeces and feathers throughout the whole of the property. Nearly all landlords now prohibit pets in their property, but this does not stop tenants from sneaking them into the house once they have taken up residence. To avoid this you or the management company should conduct regular visits to the property, these have to be arranged with the tenant but there will always be signs that animals are living at the property, for example faeces in the garden or pet food hanging around.



The extended family: This title can be a bit misleading. When a tenant arranges a meeting with the potential landlord he or she might go on their own, or with their partner. Once moved in, your local neighbours start to notice different types of people entering the property on a daily basis. You investigate and it emerges that the tenant has allowed family and friends to live in the property as well; as a result the property in question will become damaged and worn much quicker than normal.



The bureaucrat: It always good to get a tenant that understands that the property they are about to rent should be in the same state as when they took it over, but not all tenants understand that they may not get back their full deposit from the Deposit Protection Service, this could be down to something as simple as making sure that both parties agreed to an inventory check list and a Assured Hold Tenancy Agreement prior to taking the property over, the latter is a binding contract and has all the terms and conditions within it, so make sure you understand the small print. This will avoid confusion when the time comes to move on.



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.



As a professional landlord you must always keep up to date with what is going on in this market place, always keep in contact with your local letting agent or the management company that has let the property out on your behalf as they will help and guide you in the right direction. Make sure that you have an up to date inventory and list down every single thing down on it even if it seems petty, this can save you time and money when it comes to signing off the existing tenant.





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This article was written by financial expert Timothy Frodsham, who writes for Just Commercial Mortgages who specialise in providing information on buy-to-let, commercial mortgages, commercial property finance and offer a service to find the very best commercial mortgage rates available in the market.

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