Tips to help you stay profitable in property
A Lincolnshire landlord has been hit with thousands of pounds worth of damage to his property, by a tenant who abandoned the property before Christmas. The tenant did a runner owing £3,000 in rent, too.
If you add together the unpaid rent, the cost of repair work now needed, and the void period that will now ensue while repairs are being made, the landlord is probably facing a total cost of around £7,000 or more. Could the landlord have avoided this loss?
A nightmare tenant to avoid
Aavi Lillepa thought he had done a good thing when he agreed to let his Harris Boulevard, Mablethorpe property to a single mother and her child. But after a good start to the tenancy, the landlord says things quickly went downhill. For example:
- The landlord claims that his property eventually became occupied by two other adults, five children, and numerous pets – in complete contravention of the tenancy agreement
- Additionally, he says that neighbours “suffered a two-year ordeal” because of noise and disturbance
A landlord who was too soft
Mr Lillepa says that the tenant fell behind with her rent, but he decided to give her time to catch up. It never happened. She simply slipped further behind.
Mid-way through 2018, the tenant called the landlord to tell him there was a problem with the boiler. Within 24 hours, Mr Lillepa had sent out an engineer to inspect the boiler. They confirmed the boiler needed replacing, which Mr Lillepa did at a cost of £700.
A tenant who lived in squalor
Mr Lillepa said that the first time he entered the property after the tenant had left was the first time he had been able to gain access for months. What he found left him gobsmacked. Filth, mess and destruction, which included:
- Broken windows
- Floors deeply littered with rubbish
- Dirt and faeces everywhere
- Four dirty cat litter trays in the shower
Mr Lillepa was quoted £2,500 just for the clearance. Of the condition of the property – which he says was abandoned at 2:30 in the morning of the 17th December, the deadline date issued by the court to vacate the property – Mr Lillepa said:
“I can’t even put into words the filth and mess I found on entering the property. It’s like nothing I’ve ever seen before. The most unbelievable thing about the whole situation is that until recently this property was inhabited in this state.”
As a landlord, you must help yourself
Mr Lillepa feels that there is not enough support offered to buy-to-let landlords. He had approached the local authority for advice but was told there was nothing that could be done. It certainly appears that the law is stacked in favour of tenants, though we believe that there are actions that Mr Lillepa could have taken that should have helped to avoid the position on which he now finds himself.
Here is what we recommend to buy-to-let landlords who want to avoid nightmare tenants like Mr Lillepa’s single mother.
· Make sure you vet the tenant thoroughly
Nightmare tenants tend to have a track record of a misdemeanour. You should always vet the tenant thoroughly. Don’t cut corners or take the tenant’s word as gospel. Speak to previous employers and landlords. Build a picture of who the tenant is, and always undertake a credit check. Don’t be shy about searching their online social media profiles – you’ll be amazed what is in the public domain if you are prepared to put in a little legwork.
· Be careful of who you let to
I hate to say it, but some tenants are more likely to be a tenant from hell than others. Single mothers, I’m sorry to say, tend to fall into this category. Of course, this is a generalisation, and some single mothers are excellent tenants. But, with children to look after and low levels of income, what time and money they do have tends to go on their children and themselves. Cleaning the house and paying bills often gets overlooked.
· Be stricter
You cannot afford to be a soft touch. You have a mortgage and other expenses to pay. Do you think the bank would accept you falling several months behind with your payments without taking action sooner? Ofc course not. Remember, your buy-to-let property is a business. Pack those emotions away, and be firm but fair with tenants.
· Get a guarantor!
If you do accept a tenant with a less than wholesome credit rating, always insist on a guarantor. This is a great insurance policy – especially if the guarantor is a close family member. For a few tips about using a guarantor to give you peace of mind, read our recent article “Why ‘Big Daddy’ is the best guarantor a buy-to-let landlord could have”.
· Be quicker to act
As soon as something starts to go wrong, swing into action. Make sure you know the eviction rules and use them to your advantage.
· Conduct regular property inspections
Inspect the property regularly. This is the chance to make sure that no damage has been caused, and that the terms of the tenancy are not being broken. If they are being broken (for example, more occupants than on the tenancy agreement), you have two courses of action open to you:
- Speak to the tenant and tell them that they are breaking the tenancy agreement. Insist that the situation is corrected, and provide a date by which they must conform. Put your conversation in writing and make sure that they agree to your demands.
- If the situation persists, start eviction proceedings immediately.
Don’t forget, at every property inspection you should be comparing against the property inventory.
· Use an investment property manager
If you have difficulty in being strict with tenants, then use an investment property manager. At Ezytrac, we take a cradle-to-grave approach – sourcing and vetting tenants, conducting property inspections, ensuring that rents are paid, etc.
There is some good news
Though Mr Lillepa says that he is having to use his children’s inheritance to make good the damages, filth, and unpaid rent, there is some good news: nightmare tenants are, thankfully, few and far between, especially if you conduct comprehensive tenant vetting.
Live with passion,