Simon Dewsberry Posted July 22, 2007 Report Share Posted July 22, 2007 Hi All A good topic raised by Selkirk in another thread but thought it justified a fresh thread!!!!!!!!! I personally do not like the custodial scheme- so i use www.mydeposits.co.uk It costs £58 to set up and £30 to insure each bond - Reasons are The money stays in my possession and YES i do use it for other projects - (but i have the amount covered elsewhere!) Potentially removes a huge amount of admin and arguing Allows a much more direct approach to sort things with T B4 involving a 3rd party T can have bond back much quicker(if not immediately as some require for next prop) Better cash flow Better control of "your " business When a t has a "hard" month can allocate payment to rent acc to help them out for short period Also lots of "unique" situations where custodial and IG scheme will not work ie at present i have quite a few polish students here for the summer(3.5 months) who cant afford the bond on arrival so(as they are known to me!) i allow them to pay rent weekly and build a bond up over 4-6 weeks - works for me - works for them - doen' really fit in with any of the schemes though ! Running a business is hard enough as it is Period. Without third party interference and meddling !!! In my experience the "problems" with bonds tend to be with extremely un co-operative people who more often than not have gone awol... so by keeping it in my possession it removes all the hassle of trying to "get" it if required. T generally fall into 4 categories at the end of a Tennacy 1 Those that leave the prop in A1 condition and get their full bond returned 2 Minor damage and cleaning to be sorted - These T fall into 2 sub cats those that will sensibly discuss and agree a fair figure to sort probs (the vast majority !) AND those who get "stroppy" and argue that the place was a Sxxx Hole when they moved in or think that their std of cleaning on departure is good enough when clearly it is not !.............. 3 T that "disappear" before Term is up ........never to be seen again 4 T that get behind with rent and have a debt at the end of agreement (including those that dont pay the last month's rent ...allocating deposit to cover it) Trying to get custodial scheme to release on a single claim is not a process i wish to get involved in ......I have a more important things to do with my life.>!!! so i keep it where i control it ! I have implemented a few changes in my procedures to "tidy" things up !! I do a full credit check, electoral, employment (verifying that employment is permenant and adequate for ast term),prev LL ref,Take lots of details like Next of kin, Ni no, Bank details, 2x alternative address, previous address, photo id (passport or D/L) proof of address(utilty bill etc) copy of wage slip. I now also charge £100 reference, inventory, check in, check out, utility (CT gas electric and water) acc change admin and processing fee . This covers referencing (which i use a third party agency for) and the £30 Bond Ins fee and leaves a few quid over to cover the "cleaning " costs i am very likely to get at the end! Where possible i do a short video walk around with the T in shot which is saved to hard drive(to be used later if necessary) and a full Inventory.. I take a bond of the rent plus £100 min ....if i am not 100% "comfortable" with the tenant i take more .......Also take first & last month's rent ... These are my "rules" which i bend and flex where i see fit !!!!!!!!! Obviously there are cases where i require 6 mth's up front or a gaurantor as well/instead. I keep in regular contact with most t's and towards the end of Term Issue a save your bond Sheet pointig out all of the "problem areas" which could potentially cost them money -- on the basis that "we dont want your bond money -we want to gve it ALL back to you - so help us to help you !" I dont like the IG scheme, although financially it offers far more, it introduces another party to be argued with - more admin more hassle and removes too much flexibilty in my opinion. So far so good ... October will be the testing time as people start to come out of ast's and claims are made ....it is going to be very interesting... I recently posted on a prop turned into a Cannabis Factory - T had done been spooked and done a runner - Fortunately LL had £1500 bond in Ins scheme - so ad "cash" in HIS hand - job done - as it is highly unlikely that these t will be getting back in contact !!! Now if this were in the custodial or IG just how much hassle time and effort - police confirmation, admin Sxx and grief would it have taken to get that back , i wonder ..........Personally i dont intend to ever find out !! Hopefully we will get some good input on this thread from everyone as 3 months in we havent really mentioned it much on here... Common people, penny for your thoughts ............ Simon Link to comment Share on other sites More sharing options...
Melboy Posted July 22, 2007 Report Share Posted July 22, 2007 Mines in www.computershare.co.uk.... it's free and very easy to operate, it's protected and suits me fine. I don't have a large amount of properties like Simon so I am not concerned about deposit money. Having said that I am bu$$ered if I am going to actually pay for the privilege of storing money in someone elses bank account! Mel. Link to comment Share on other sites More sharing options...
Matthew Posted July 24, 2007 Report Share Posted July 24, 2007 Don't have deposits anymore. Charge 2 months rent in advance. At the moment to cash-strapped to hand the money over. Also not convinced it will help anyone. Won't be surprised if we hear stories of it taking 6 months to get money back for both Landlord or Tenant. Then what will the tenant do when he/she needs it for next property? I agree, it's just a load of extra un-necessary admin. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 24, 2007 Author Report Share Posted July 24, 2007 Why not charge an admin fee to cover the £30 - then you can sit on bond - regain an incentive for t to look after prop a bit better and give back immediately ? or at least use the ig scheme which will cost you nothing ? At the moment to cash-strapped to hand the money over. diont understand this Matt as it is not coming from your funds - T will be giving it to you !?? Simon Link to comment Share on other sites More sharing options...
Matthew Posted July 24, 2007 Report Share Posted July 24, 2007 Maybe I'm too nice, but I feel like I'm taking the p*ss charging a fee, although I think it may be the way forward. Options are: 1: Charge 2 months rent in advance = I have 2 months rent in pocket 2: Charge 1 months rent in advance and take 1 month as deposit and hand over deposit = I have 1 month rent in pocket 3: Charge 1 months rent in advance and take 1 month as deposit and insure deposit = I have 2 month rent in pocket, but pay £30 on maybe a £300 deposit, not good value and could cost me upto £700 for the year (worst case if all tenants stay only 6 months) on just 2 properties = complete rip off. In summary I can't afford to lose the £3,950 extra month at the moment and don't want to pay £700 a year to insure it :-) The maths just don't add up for an HMO in terms of the new deposit rules and with all the added complications involved, can you imagine making a claim where shared area concerned! Re IG: I don't think I'll be able to persuade tenants to go down this route, cost them £60 odd a year etc, my tenants generally are trying to save money and would not be happy about that. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 24, 2007 Author Report Share Posted July 24, 2007 Matt £700 is 23 X £30 how many t you got in 2 props ..........!? 1: Charge 2 months rent in advance = I have 2 months rent in pocket only until mth5 then NO COVER AT ALL ! 2: Charge 1 months rent in advance and take 1 month as deposit and hand over deposit = I have 1 month rent in pocket Insure and pass cost to T 3: Charge 1 months rent in advance and take 1 month as deposit and insure deposit = I have 2 month rent in pocket, but pay £30 on maybe a £300 deposit, not good value and could cost me upto £700 for the year (worst case if all tenants stay only 6 months) on just 2 properties = complete rip off. Pass cost to T OPTION 4 - take 2 months AND deposit - and use custodial(free) OPTION 5 - take 2 months AND deposit - and use INS pasing cost on ..... The problem you are going to have is that T has no incentive after month 5 as they have no financial "commitment" after this time - why would they want to bother even cleaning ? Simon Link to comment Share on other sites More sharing options...
Matthew Posted July 24, 2007 Report Share Posted July 24, 2007 Hi, I was assuming that the tenant moves on every 6 months = 11*2*30, plus original setup fee £58 = over £700, very worst case. The tenant is always 2 months ahead, the agreement states that rent is paid 2 months in advance, not 1st and last month. But yes, if they give 2 months notice then in theory I could be screwed. In reality most run into periodic and then give one month notice, so I give them the rent they have paid in advance back at the end. I cannot keep this, and wouldn't, but the fact I have it counts for something. Even if they don't clean, it usually takes an hour or so for me to clean a room, it is not worth all the admin and cost for that. Even if damage done, it is usually more cost affective to fix and get on with it. Time spent often arguing with Tenants outweighs the cost of filling in dents in the wall, fixing beds etc. Obviously in severe cases, this is not True, but then the £300 deposit won't cover that either. Most HMO tenants can't afford/don't want to afford option 4 and 5. Mat. Link to comment Share on other sites More sharing options...
Selkirk Posted July 24, 2007 Report Share Posted July 24, 2007 Hi Looks like there are a few ways to go here depending on the number of properties. I've only a couple so the cost will govern which way I go but I do want control over it, afterall I won't be doing a runner. Trouble with the joint schemes is if the T and LL have a fall out it could cause a stalemate for ever more. What I'm trying to get my head round is, a new T agrees to all the terms and conditions of the AST by signing it prior to moving in and if it's written in the 'contract', whatever your chosen method is, then surely this should be ok as both parties agree. cheers Link to comment Share on other sites More sharing options...
Grosvenor Posted August 7, 2007 Report Share Posted August 7, 2007 Hi, have just 'found' this forum through internet search. Very interesting, wish i'd seen it before. Looking for something on TDS i came upon this thread. So i just registered as I wanted to say how much i agree with Matthew. You seem to be doing exactly as i am. It's a trade off. 2 months rent up front is ok until the end of the tenancy when i just hope the T leaves my property in good shape. But looking back over 34 years letting i recon the risk is small and I have 'control' of the money. I have 19 letting properties; mostly HMO's. Letting mostly to people with little money on low income. No DSS. No under 25's. Most have been with me for 3 years+ so we know each other very well. Anyway, there you have it.....my first post. Best wishes to you all, Paul Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted August 7, 2007 Author Report Share Posted August 7, 2007 Hi Paul/Matt Cannot agree at all: what possibe motivaton has a tenant got to even clean , let alone look after the place ...? Put dep in free scheme - nothing lost ! or charge them admin to protect it .... what have you got to lose ? Simon Link to comment Share on other sites More sharing options...
Grosvenor Posted August 7, 2007 Report Share Posted August 7, 2007 Hi Simon, I'm just going off past experience of 30 years letting experience here in my sleepy home town of Driffield in East Yorkshire. I know my tenants and just cant see any of them leaving a property in a bad way. I have started charging a £35 admin fee, which will go towards paying my cleaner. I have usually 2 or 3 lets a year. People stay with me. I give good service. Also, over the last 6 years I have not taken DSS claimants or 'young' people under 25 years of age. This means all my tenants are mature and in employment. This all works very well for me but i guess it's horses for courses; might not be workable in a differant letting environment, regards, Paul Link to comment Share on other sites More sharing options...
hein25 Posted August 7, 2007 Report Share Posted August 7, 2007 Hi Simon, about the taxman watching ,BIG SHOTS .like y maybe ,not minny mouse like me nothing shifty ever!!not my style...trying to sleep at night despite current difficulties!! Agree on with y on the deposit front and use MYDEPOSITS too ,I have learnt a lot from y .so thanks.maija. Link to comment Share on other sites More sharing options...
sonki Posted August 7, 2007 Report Share Posted August 7, 2007 Just came across this site. Its very helpful. Amazing tips. http://www.poopka.com Link to comment Share on other sites More sharing options...
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