Seasons greetings all!
Hope everyone had an awesome Christmas! I’m generally not a Christmas person, but mine was pretty good (better than recent years). I’m at that awkward in-between age; too old to get into a Christmas frenzy, and too youthful, sexy and beautiful to have my own children (no one say a word). To me, Christmas is all about the children. Fortunately, I don’t have any of those snot-bags, unless my parents count, so it really was all about them. They still find it hilarious when they wear the Christmas Cracker paper-crowns, so there’s no killing their giddy festive spirit.
With buying presents, joining in with the mandatory festive social events, squeezing in a trip to Vegas and having to completely renovate a bathroom because my previous tenants are the spawn of Satan, I spent a small fortune. I budgeted for everything, besides from the wrath of my numb-nut tenants.
To make matters worse, the problems with my tenants happened at the wrong end of the year. By the time they vacated, the manic Christmas period was approaching. Trying to get the property they shat all over back to good order around this time of year was painful.
On a more positive note, the property is ready now, so as soon as the new year kicks off, I’m going to start looking for new tenants. Great.
After my most recent debacle, I’ve admittedly been scarred; scarred like a wounded deer that’s been shot in the nuts by a hunter, consequently I’ve decided to take extra safety precautions this time round, which I wouldn’t have ordinarily taken:
Ask for a larger deposit
I’ve always asked for one month’s rent as a deposit in the past, but I’m going to jack it up to 6 weeks now. The advantages of getting a bigger deposit are mostly obvious, but here are my personal reasons for doing so:
- Most importantly and obviously, it will cover more potential arrears and damages
- I’d rather avoid going to court to chase money, so the more I can recoup via the deposit, the less chance there is of me bothering to pursue the Judge Judy avenue
- This particular property is in a desirable area, so vacancies get snapped up quickly. The volume of interest is there to warrant the increase
- I’ve looked at similar properties in the same area that are currently for let, and most of the landlords/agents are also asking for 6 weeks deposit
- Landlords/agents asking for 6 weeks deposit really isn’t that uncommon anymore, so prospective tenants shouldn’t be alarmed by it
- I’m going to go out on a hunch and assume that prospective tenants that are prepared to pay 6 weeks deposit will be financially stable (at least more so than those refusing to pay that amount)
Update: on the 1st June 2019 the “Tenant Fees Act 2019” came into force; the act stipulates that landlords in England that start a tenancy on or after the 1st of June 2019 cannot take more than five weeks’ rent for the tenancy deposit where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above. Taking a deposit that exceeds the maximum cap can lead to penalties starting from £5,000.
For those landlords that take tenancy deposits in England and Wales (which I imagine is 99% of landlords), you should also ensure that a suitable property inventory is put in place, otherwise taking a deposit, let alone a large one, can be pointless when trying to recoup money for damages.
Tenancy Deposits must be secured in a Tenancy Deposit Scheme, so if a dispute between tenant and landlord occurs, they will ultimately decide how the money is divided and returned. In order for landlords to stand a chance of claiming money for damages, they must present their case properly, where they can prove what damage was caused during the tenancy. Here is an excellent article on how to put a property inventory together (not only because I wrote it, but because it has information from an adjudicator explaining the process).
Obviously, the risk of putting any extra precautions in place will alienate some prospective tenants. The more safety precautions a landlord puts in place, the fewer prospective tenants will show interest. However, the odds are, the landlord will most likely end up with better tenants.
In any case, you still need to calculate the risk. I’m taking a calculated risk, as the property is in a desirable area where vacancies don’t crop up all that often, so I don’t think my decisions will slow down any progress. In a struggling market/location, taking extra precautions like jacking up the deposit may cost dearly. Something to take into consideration before you ruin your livelihood on the whim of following my useless dribble.
Besides from the safety precautions mentioned above, I will be following the standard protocols that all landlords should be following when finding new tenants:
- Referencing & Credit checking tenants
- Request employment and previous tenancy references
- Be wary of scams e.g. tenants that offer large sums of cash upfront
- Require a Guarantor
- Use an up-to-date written Tenancy Agreement
- Avoid DSS tenants (ooooh, I went there. Controversial)
More details on Landlord Guide On Protection Against Bad Tenants.
Does anyone have any other sensible tips to limit risk? No? Ok, well wish me a happy new year and be on your merry way.
Happy New year everyone x
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.