Over a quarter of landlords experienced rent arrears in last 12 months
Fresh research by the RLA has revealed that more than a quarter of buy to let landlords have experienced rent arrears in the past 12 months.
With 28% of landlords experiencing rent debt, coupled with the fact that 1 in 3 working families in England would not be able to afford to pay their rent for more than a month if they lost their job (due to a lack of personal savings), it is important to note that an increasing amount of BTL landlords are understanding the importance of rent guarantee insurance.
With this in mind, here are 3 top tips to help UK landlords and letting agents deal with rent arrears:
+ Prevention is better than cure!
A proactive tenant referencing system is the first step to preventing rent arrears, as it increases the chances of finding a tenant who will pay their rent on time through our unique Tenant Histories. Coupled with their credit history, this instills confidence that they are reliable, as well as providing peace of mind that they have the Right to Rent in the UK.
+ Communication is Key
Landlord/Tenant situations can easily escalate into dispute territory, usually because of a lack of communication. Therefore, we recommend that you get in contact with your tenant as soon as a payment has been missed. By taking swift action in a friendly and informal manner this will show your tenant that you are on top of the situation; where in most cases the tenant will pay up. Furthermore, our landlord/agent members find that if they politely warn their tenants that if they continue to default on their rent that this information will be uploaded onto our Tenant History database; which could be detrimental to their future tenancies.
+ Invest in a Rent Guarantee
What people forget is that when they have a mortgage they are obliged to pay up to a 10% deposit on it, so that the lender has an asset to lean on should they fail to make the mortgage payments. This is why more and more landlords are understanding the value of rent guarantee and legal expense insurance – because it takes around the same time to evict a tenant as it does if they fail to pay the mortgage. And, what with less landlords taking deposits, there is all the more reason to take out RGI to ‘lean on’ if the tenant fails to pay their rent.