SMILE Posted April 12, 2006 Report Share Posted April 12, 2006 Hi all Ok here goes ....... Latest in my very new life as a landlord ! I've ditched the Letting Agents and decided to go it alone......I've had an enquiry from a guy who has openly admitted he had money problems because his wife 'milked him dry !' during their divorce so he is unable to take out a tenancy agreement in his own name / refs etc.....so he tried to go through with a company agreement ....(his double glazing employer initially agreed to set up a six month tenancy agreement on his behalf as he earns good money) He has since told me that this is now a problem...He has told me that the company's accountant had a problem with them doing this .....so NOW he has called me and offered to pay FOUR MONTHS UP FRONT PLUS DEPOSIT (rent is 895 per month)......on a six month AST. He would be moving in with his girlfriend and her two children AND a lady that he is currently housesharing with. He earns 35k a year, his girlfriend earns 150 pounds a week and the other lady earns 12k a year.....How would this work when it comes to insurance ? Do I need to have good references on at least one person for insurance to be valid ? I want to take out an insurance that covers me for maliscious damage and theft by the tenant and accidental damage by the tenant......not because I think he will be a problem...he does seem ok but I will just sleep better at night knowing that I am covered.... I'm thinking of going to see a solicitor to set up an agreement...but not sure who to set up the tenancy agreement with and if I agree for others to stay at the house...what kind of rights will they have if they aren't on the tenancy agreement ? Sorry for all the questions !!! last one I promise.. Ref the deposit , could I use that money / hold it back if they don't pay me any more money ? .....I'm thinking as long as I'm insured.....and i've got five months money up front....and I DOUBLE CHECK their employment , bank details etc........worst I can lose is one months money if they don't pay ???? Am I wrong ? Advice from you more experienced people would be truly appreciated as I've got to try and give this guy a reply soon THANKS Link to comment Share on other sites More sharing options...
F-Prop Posted April 12, 2006 Report Share Posted April 12, 2006 Hi Smile, In short, I really think you can do better than this guy. It's quite common for a guy who's run up debts to "blame the other half" it's happened to me and I was suckered into believing him and low and behold he didn't pay and kept writing cheques that bounced! If you want my advise, find yourself a better tenant who can pass a credit check, then you won't need the insurance, and you'll sleep much better at night! Besides I doubt you'll get anyone to insure you against non-payment or rent if they can't pass a credit check! If you do take him on make sure the cheques have cleared BEFORE you hand over the keys. Make sure everyone who lives at the property is signed on the tenancy agreement, that way if one does not pay, you can get it from the others. In answer to your questions, yes the bond can be used to cover the rent if it is not paid, so theoretically on a 6 month agreement you would already have 5 months paid so would only lose one month but that is IF the payments don't bounce and IF there is no damage at the end and IF he leaves when he should. Good luck!! Trevor. Link to comment Share on other sites More sharing options...
SMILE Posted April 12, 2006 Author Report Share Posted April 12, 2006 ~Thanks Trevor...really useful information there. I'm trying to cover all of the IFS so as to limit any potential damage.....the way I see it I can cover all of the IFS you raised apart from the IF he doesnt leave on time and the IF he doesnt damage the property....nothing I can do about the doesnt leave on time...would have to go through the nightmare of eviction on my own....with hardly any experience which truly scares me ....but I think I can cover the insurance one.....for maliscious damage, theft by tenant and accidental damage....( NOT SURE ) I will have to call the insurance company tomorrow and let them know the score and see if they would cover me......I appreciate your advice and I agree I can probably do better....equally I do need to get someone in soon ....If I can minimise the risk as much as possible and get the IFS down to just ONE and cover everything else you have suggested I might consider going ahead...if not ....I'll keep on waiting Thanks again for your advice Link to comment Share on other sites More sharing options...
Trenners Posted April 18, 2006 Report Share Posted April 18, 2006 Hi Smile, I totally agree with Trevor. The biggest mistake that you can make, as a new landlord, is to accept the money from the first tenant that offers you it ! This propsective tenant seems to have a complex background. If he is willing to pay 6 MONTHS rent - plus the security bond - up-front in cleared funds (ie: cash) then I might consider taking him (because there is no risk he won't pay his rent). Otherwise - as Trevor says - wait for a better tenant. It is wiser to have the house empty for a few days than having the house full (with a tenant who is not paying his rent for 6 months) ! Good luck, Mark Link to comment Share on other sites More sharing options...
brown_a Posted April 21, 2006 Report Share Posted April 21, 2006 Based on my experience of using a Agent (which I don't now) who let out a house to a company who paid a cash deposit and a cash upfront (I should have smelt a rat) and who had a similar sort of story - I would agree with everyone else. Don't touch the guy. When it gets as complicated as this it's simply not worth going for. Be patient. The right tenant will come along. You're in a bit of a panic now trying to find a tenant and you don't want to lose time and money but if it goes belly up with this guy it'll cost you a lot more time and money. Incidentally, the agents had let the house to a guy who set it up with 15 B&Bs (4-bed house) - can you imagine! Stick with it. Link to comment Share on other sites More sharing options...
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