2nd buy-to-let advice please

bamberbamboo

Afternoon all,

We have had a property that we let for the last two years and have decided to go for another we've had an offer accepted on a flat and found someone interested in renting I was just wondering what the situation is with DSS tenants, our other property is let to a gentleman with diabetes and the rent is paid by the council he will never work so will always be covered, but I have read somewhere that if your tenant is claiming housing benefit that they where not entitled to the landlord has to pay it back? now I don't want to have to go down the route of 'NO DSS' as we are deperate in our area for accommodation for people on benefits but this is worrying me... any ideas?

also if anyone knows of a link that can tell me what a landlord is legally responsible for would be great.

Thanks

BobProperty

Lots of info in the past on this forum and others. I wouldn't but anything at present even if I could afford it and I would also be very reluctant to rent it to HB tenants except like the one you have already. Don't forget, HB tenants are soon to get the rent paid to them not the landlord.

silvercar

HB tenants are soon to get the rent paid to them not the landlord

Which has the advantage that it can't be claimed back.

bamberbamboo

BobProperty wrote:

I wouldn't but anything at present even if I could afford it .

why wouldn't you buy anything at the moment?

silvercar --- That sounds better, I have contacted an organisation called 'agorfa -- housing for people who need it' this afternoon who have said that they have some sort of arrangement that they cover things for this.

BobProperty

silvercar wrote:

Which has the advantage that it can't be claimed back.

True. Although I haven't been personally involved in the back claiming by LA's and I don't know how legal their actions were. It's a few years back that I took some interest in the specifics and I think it was a "grey" area at the time.

BobProperty

bamberbamboo wrote:

why wouldn't you buy anything at the moment?

...

If I were to buy a business I would be looking at 20-25% return. If I were to buy a property to rent I would be looking for 15% return of gross rent to capital cost. If I want to keep my money on deposit I can get 5%. If you are buying a property to rent out and the gross rents give about 5-7% return then I think you are heading for trouble if you need to borrow money to fund the project. (And if I had the cash it would be on the markets not in property at present).

bamberbamboo

thanks bobproperty for your reply,
I do have to borrow to fund the projects but still think long term, 25yrs I will be ok, the area I live in has very little rental property and prices are crazy for first time buyers and council have property in only three small areas and they are mostly brought privately and council not building, I heard this week the local council had put a couple into a holiday site and where paying £250.00 a week for their rent also a local b & b is full of dss and they get £45.00 per night per person so I will pop along on Monday to our council and put it to them that I could maybe offer them my lets at a price to cover my mortgage of course, what do you think, do you think that makes sense? I'd appreciate your opion

BobProperty

Quick response just to say I'm out of renting these days and my knowledge is not 100% up to date. The direction HB was going in was a standard set of rents for an area for a tenant. E.g. Single mum, 2 teenage kids equals a 3 bed house equals £66.43 per week rent. I don't know what the actual rules and figures are and they vary from LA to LA, obviously.
ts - LAs have chased landlords for HB overpayments. I'm sure this isn't an urban myth. Besides, even if they are in the wrong, what do you do as a landlord if they stop paying you?

lynzpower

you wanna look at this http://www.therentservice.gov.uk/

if you are looking at renting to DWP/ DSS clients, your first port of call should always be there. Ive heard that they are also excellent to deal with.