UK Landlord Forum / Life

I shall apologise now for being a newb. This will Be our first property that we will have rented out and have used a local estate for the advertisement. We have refurbished the property to a good standard and aim to attract professionals. We want to achieve as low a risk rental as possible and have instructed a local estate agent of our intentions.
The estate found a very nice young couple for tenants however they failed to pass the income threshold for our property but have offered to pay the full six month rental up front. The agent pushed us into a corner to agree this set up however we now feel like all we are doing is airing up a problem for the end of the initial 6 month rental agreement.
We are currently within the vetting stage with the tenants due to move in by the 18th of December.
Any advice would be appreciated.

You are absolutely right.The six months will pass very quickly,so unless one of them is expecting a guaranteed decent pay rise in the meantime, you will have problems. Estate agents don't care,they will get their fees paid by both sides upfront.What is the point of doing such checks only to ignore the findings?

Doesn't sit with your 'low as possible' ideal, hold out for someone else.  Your house, agent works on your command and won't even remember who you are in 6 months time.  I use open rent, do viewings myself to meet prospective tenants, use my gut, credit check and pick the 'best'*

(*there's no such thing really)

Quote from: J143 on December 09, 2017, 06:15:10 PMThe estate found a very nice young couple for tenants however they failed to pass the income threshold for our property but have offered to pay the full six month rental up front.

What is very nice about them?

Who is judging their level of niceness / niceability? You or the Agent? If it's just the Agent telling you that they are very nice you can take that with a pinch of salt. If you've come to your own conclusion, having met them and started to get to know them, then you should be able to make a better assessment with that information (it's not all about a tick in the box on a piece of paper)... so, which is it? Most very nice Tenants can afford to pay the rent requested for properties they apply for.

What can you do to get beyond this?

You can lower the rent... so they pass the affordability checks... then not only with you have very nice Tenants, these very nice Tenants will have a very nice Landlord too.

Win-win?

Quote from: heavykarma on December 09, 2017, 06:53:12 PMWhat is the point of doing such checks only to ignore the findings?

Normally, I would agree - if it was a paid-for check from a service doing Tenant referencing. What I noted, though, was that this wasn't specifically called-out here. When the OP says "failed to pass the income threshold" I tried to not assume what that actually was and I thought it could actually be a simple multiplier sum... we know those don't tell a true story.

Mortgage Lenders tried it years ago. Then 2008 hit us. My question is about whether the OP has had direct contact with these very nice Tenants, or is somewhat removed.

At the end of the initial 6 months are we able to give them notice to move out or pay another 6 months in full.

I am also conscious that the agent has put the couple in a difficult situation as they are using their savings to fulfill the 6 months initial payment.

We insisted on meeting the couple so that we could assess them as individuals and gave us the opportunity to form our opinion of them.

I am struggling to understand this a bit - stupid I know... so we have achieved our 6 months rent for the 6 month tenancy... can we just not tell them that they have to leave in the date the tenancy expires??

(I'm expecting the experienced/exasperated  landlords to shout at me now  🙈)

At the end of the 6 months you can give your Tenants notice to move out, yes.

Most Landlords like Tenants to stay-on. You had implied this was about affordability and lowering risk... but is it actually about extracting the most money for your property? You see, you can balance things out to suit you... if these Tenants you met and assessed as being very nice (and who can obviously save quite well) only fall down on affordability, then the power to change that lies with you. Just because you want £750 for a property (because you were advised that, one would presume?) it doesn't mean you have to take that. You're in control. You can take £725 or £700 if you want... because that decision might well make this tenancy the low-risk tenancy you desire.

Asking Tenants to leave after 6 months just starts the headache for you again... and with a property that now has a little extra wear-and-tear... the average tenancy length in the UK is 18 months. I'd like 18 years.

It's all just maths.

We do not understand by how much they failed the affordability check. Nor, really, what that check consisted of.

Yes,Hippogriff's lateral thinking could work.If they are good tenants and want to stay after 6 months ,maybe a small drop in rent could do the trick.It depends really on how much below the  advisable threshold they fall. Having tenants leave after 6 months can end up costing much more than a modest rent decrease..If you feel embarrassed about turning them away at the outset,tell yourself that you are not helping them  by allowing them to live beyond their means.I have seen so much misery  start that way.

And... having voids (now, or inbetween tenancies) is not desirable as it usually means you get hit with some outgoings for bills and Council Tax (unless you're one of those lucky Landlords where there is breathing space provided by the Council - I'm not).

So... how much is the rent and how much did the affordability check say that they could manage?

Quote from: J143 on December 10, 2017, 08:46:01 AMI am also conscious that the agent has put the couple in a difficult situation as they are using their savings to fulfill the 6 months initial payment.

To understand situations you need to understand what drives people.

To the Agent, your property to let is just an immediate problem that should be removed as soon and as easily as possible... by whatever means. Them exerting pressure on the Tenants to extinguish their savings is not unheard of. It's not clear what the Agent is going for you - is it let only or fully managed (with them taking a portion of the rent paid)..? If the former, they get nothing more for getting you the right Tenant - any Tenant will do. If the latter, then strong-arming the Tenants to pay 6 months up front also means they get 6 months commission / management fee up front. At the end of the day most (not all) Agents want easy money and a simple life (and this is not necessarily wrong of them) and their professional (sic) obligations towards yourself will likely come as a secondary or tertiary concern.

I have taken 6 months up front before - but that was with rich foreign students. The most I've ever taken up front from your more normal Tenant was 3 months (that was just to demonstrate the ability to be financially responsible after they'd got some CCJs in their younger days).

I had 12 months paid upfront by the Chinese Government,for 2 postgrad research students up the road at Warwick Uni.They had also been warned that any reports of bad behaviour while in the U.K. would be punished!

A similar situation happened to me a decade ago and I was pressurised by an estate agent to rent out a property to a couple who offered to pay the 6 months upfront. As others have said, the end of the tenancy came round very quickly and neither of them had more money to spend on rent at the end of their tenancy. Sadly they also damaged the property pretty badly and it ended up costing me more in repairs than their initial deposit covered.

After this episode, I spent an extensive amount of time trying to find the right estate agent for me http://www.surepropertysolutions.co.uk since then I have never had issues with tenants or unreasonable requests as I have been clear was is and is not acceptable to me. You are not obliged to choose a specific estate agent, so spend some time to ascertain whether or not an estate agent is right for you.

-Jeff