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Plan Ahead To Avoid The Pitfalls Of Being A Landlord


Tuesday, February 10, 2015
Plan Ahead To Avoid The Pitfalls Of Being A Landlord

Plan Ahead To Avoid The Pitfalls Of Being A Landlord

Planning Ahead Means Landlord Life Isn’t All That Bad

The BBC showed an interesting insight into being a landlord, on the 2nd February 2015, as part of its ‘Inside Out’ series.

The programme focused on landlords who had fallen into difficulties after building property portfolios using Buy To Let mortgages in order to try to provide for their financial future through property.

The TV programme featured a portfolio landlord whose renting tenants were claiming either housing benefit or local housing authority (LHA) payments directly and had defaulted on payments to the landlord.

The lack of rent had forced the landlord into financial difficulties, making him scale back his property investment strategies because he needed to instruct a tenant eviction specialist to handle two simultaneous tenant evictions at once due to increasing rent arrears.

There are still so many positive benefits to being a landlord and investing in property in the UK, but there are also a few pitfalls that landlords need to be aware of, and ensuring that the rent comes in every month is high on the main list of priorities.Landlords who accept benefit tenants don’t always conduct thorough tenant referencing and background checks on every applicant, some ask for a guarantor to vouch for the prospective tenant, although they should thoroughly tenant reference every applicant as well as their guarantors.

Landlords with working tenants can opt to ensure continued rental payments using specially designed Rent Protection insurance policies, provided that the tenants were properly tenant referenced before the start of the tenancy.

Some tenants claiming benefit (LHA) payments don’t always prioritise their obligations correctly when it comes to paying the bills, however rental payments can still be requested to be sent straight to the landlord once the tenants are more than 8 weeks in rent arrears or are classed as vulnerable and unable to manage day to day finances, however, proof of this situation will be required.

It isn’t all bad news for landlords with LHA tenants, as there are some great tenants who have little choice but to claim some form of benefits, who pay their rent and bills on time, every month, and look after the rental property as if they owned it, rather than constantly relying on the landlord to provide everything.

Whether tenants are working or claiming benefits, it is vital to ensure that proper due diligence is undertaken and the appropriate tenant referencing, credit checking and background checks are done by reputable professional specialists in order to establish that they have the means to pay the rent every month.

Landlords need to keep in regular contact with all tenants and ensure all channels of communication are kept open. This enables the tenants to contact landlords immediately if they have any difficulties and work together to find the appropriate solution.

Don’t despair, check out the benefits of Rent Protection offered by Legal 4 Landlords today!

 


This was written by Mike Clarke. Posted on at 11:30 am. Filed under Insurance. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.