17/10/2011 
Samii
Well, I really enjoyed my first property show / exhibition at The Property Investor Show, ExCeL, 2011.
Unfortunately I was only there for the first day but the atmosphere was electric, and it was lovely to meet Mary Latham & a whole host of friendly & interesting landlord characters – who took a keen interest in our stand.
I learned a great deal in just a day, and was also lucky enough to observe The Great Landlord’s Brainstorm, hosted by Vanessa Warwick & Nick Tadd of PropertyTribes.
The GBL was inspired by Vanessa’s recent blogs; The Tenant Of The Future & The Landlord of The Future.
The idea of The GBL centered around a panel of Landlord experts, who were:
who answered and discussed questions, suggestions & ideas put forward to them by the landlords and agents who attended.
Amongst a number of passionate topics that came up throughout the brainstorm, which I shall be blogging about later this week, the one that Landlords & Agents seemed to be most worried about is the increasing chance of private tenants becoming LHA tenants; in these times of redundancies, housing shortages, economic crisis, etc…
Although it was a relatively small gathering of landlords and agents, the general consensus seemed to be a little stereotypical and slightly unfair, with the main worries being:
- LHA tenants are more likely to get into rent arrears
- LHA tenants are more likely to damage property
In reality, there are just as many bad tenants out there who are NOT LHA tenants; who get into rent arrears and/or damage property – which, as a company, we can confirm; as we have hundreds of Tenant Uploads a day, with more than half of our members NOT accepting LHA tenants. (Our Tenant Database currently stands at just over 200,000).
If you look at it another way, the landlord & letting agent of today is getting a very bad press and reputation in the mainstream media at the moment – with all these stories from tenants coming out about their “rogue landlord”, etc.
Now does that mean that EVERY landlord and letting agent is corrupt throughout the UK?…!
At the end of the day it is purely your choice whether to take on LHA tenants or not, but what it boils down to is if you don’t move with the times and don’t think about the tenant of the future then I truly believe you will not survive for long as a landlord of the future.
As long as you are aware of the tools that are available to you and are vigilant and responsible in the way that you go about being a landlord/agent you shouldn’t go wrong; e.g:
- The Internet(!!!)
- Tenant Referencing
- Landlord Forums
- Landlord Associations
- Direct Debit Rent Collection Facilities
- Tenant Eviction Companies
I’d like to invite you to comment on this topic, below.
- Do you have a horrific story to tell about an LHA tenant-from-hell /
OR a happy story to tell about your good LHA tenants? - Do you have a horrific story to tell about a working tenant-from-hell /
OR a happy story to tell about your good working tenants? - Do you disagree with any of my points?
- OR do you just want to have your say?
Further reading: My Property Investor Show 2011 … #propshow … By Vanessa Warwick of Propertytribes.
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What this brainstorming session highlights is the importance of obtaining RGI on your existing non-LHA tenants before they become them.
That way you are covered and can evict in the knowledge that the RGI company will cover everything.
Remember on certain RGI policies if a tenant’s circumstances change, providing they manage to pay the full rent then the original RGI credit check still stands.
So you may obtain further RGI policies but without the RGI check which they would obviously fail if they were on LHA.
Remember once they are on LHA that will be considerably less than the market rent they were previously paying.
So it is either evict or suffer receiving less rent.
If you go to evict and DO NOT have a RGI policy in place the tenants will stop passing on LHA.
This as they know it will take months to evict them; you will have to try and recover the 2 months of rent arrears as the counciul will say it is nothing to do with them as they passed the LHA to the tenant and therefore you have to pursue recovery from the tenant.
Do you think it is worth going to county court after having paid about £200 to attempt recovery.
Ans you stand no chance whatsoever.
So watchword is obtain RGI on ALL your non-LHA tenants NOW!!
You will not be able to recive LHA directly until 2 months rent has not been paid and we are talking about 2 calendar months not 1 month and 1 day.
This is just an idea but would you be able to set up a procedure where tenants could make payments via credit cards to their respective landlords.
You then pass the monies on to the landlord.
Most private landlords are not big enough to set up as a merchant retailer with a card machine.
This would then assist tenants to meet the rent payments.
This as I am not the slightest bit interested in the amount of unsecured debt a tenant has providing my rent is paid.
If a tenant defaults there is not a lot the credit card company can or will do.
This could be a facility you could set up for your landlord membership.
I would offer the option to tenants as it is known that more tenants are using credit to get by.
There would be a charge for the tenant in using the service; but most tenants would be grateful to have use of such a facility to pay their rent.
The cost for tenants to borrow on credit cards is reduced and prohibitively expensive whereas a payment would be treated as a purchase so they could even time their rent payment with the agreement of the landlord to 1 day after the particular card statement.
That would give the tenant another 56 days to pay the bill caused by paying the rent on that day after the card statement date.
You could even say a fee is charged to the tenant for such a card payment facility; say £10.Multiply that by your landlord base and that is only one tenant per landlord, that is a lot of money in the company coffers
You should get a good merchant dealer deal.
Average rent paid per tenant could be £7500 per year. That is an awful lot of fee incomne for the card company.
Not all tenants would take up such a facility but I reckon an awful lot do.
I think most tenants and homeowners will struggle over the coming years and won’t mind getting into unsecured debt if it means thay can keep a roof over their head.
Just food for thought!!?
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