Renting a place, paying 6 months in advance?

JonnyH

Hi. Ive recently been looking for a place to rent out & found the one im looking for.

However because im currently unemployed (been busy renovating my current house that i own, another story) the estate agent wants the full 6 months rent upfront in advance & ive agreed to do this.

I am wondering though if this is a good idea ?

I have read that paying upfront is a bad idea, as the homeowner/landlord may not have been paying their mortgage off enough & end up with their house being repossesed = i lose the money.

Just wondering if anyone has any idea of what i could do to assure this wont happen ? Or any other reasons why i should be wary of this...
Really like this place.

Thankyou !

estelle123

can you not get a guarentor

JonnyH

Thanks for the reply.

It is possible but puts me out a bit, would you suggest going down that route more ? If so why ?

The guarantor would have to be my uncle who lives in wales & id have to find a way for him to sign everything & send it back. Amount of time taken might hamper my chances of getting the place atall so id prefer to avoid it unless ofcourse paying upfront is realistically dangerous & theres no way i could protect myself otherwise!

princeofpounds

If you cannot fund a guarantor then you cannot avoid the prepayment.

You might be able to place the first 6m rent in escrow with a solicitor and draft a very careful agreement over when it gets paid out and to whom. There would be a charge for that but it would insure against LL bankruptcy.

I would not pay 6m to a LL if at all possible. I myself had to leave somewhere thanks to a repossession and you sometime do not get much warning. If you do, ask if you can credit check them if possible to make sure as you can they are not in a precarious situation.

Notlob

Obtain evidence that the landlord has gained consent from the mortgage company, if applicable, and you will get greater protection in the event of repossession.

Don't just assume the issue is with the LL. Have you considered the LA, who may be holding the advance rent and paying over monthly to the LL. Do they subscribe to a client money bonding scheme such as ARLA's, although rent paid to a LL's agent is deemed to have been received by the LL, so if the LA does a runner it is the LL who is out of pocket. With this in mind, I would ensure there is written evidence that the money paid over is in fact for rent and the period it covers you for. A LA who is a member of a professional body such as ARLA should provide you with more confidence.

Notlob

pinkshoes

I agree with Notlob.

If they're wanting 6 months upfront and scrutinising you as a tenant, then tell them you would also like information on the landlord, evidence that they've got permission from their mortgage lender to rent the property out, and written confirmation that their mortgage is not in arrears.

estelle123

I used a guarentor,all paper work was done by fax ,a lot safer then handing over 6months rent.

bumpoowee

This isn't a good idea and could put you at risk of losing the money if your landlord goes bust. But since you're unemployed you may be stuck with that risk.

aimeesmummy2007

My dad done this with a agent 5years ago because of the same reason (being unemployed). He used to pay the agent cash every month & didnt get receipts because he sort of knew him & he trusted him! A year down the line the agent & the landlady knocked on my dads door & infront of my dad the agent accused my dad of not paying any rent FOR A YEAR!!!

My dads agent had pocketed all that money & lied to his face & lied to the landlady too!!

In the end my dad caught him out by having a 3 way conversation on the phone between them all. Now my dads just got a contract with his landlady, thank god she believed my dad!

Id steer clear is what im trying to say! Unless they are a well established agent & as the previous person said get it in writing from the LL's mortgage company!

Sammy85_2

Notlob wrote: »

Have you considered the LA, who may be holding the advance rent and paying over monthly to the LL. Do they subscribe to a client money bonding scheme such as ARLA's

Our tenant paid 6 months in advance due to having a very poor credit history. We received monthly payments as usual. No problems with the arrangement, you do hear some horror stories though, just be cautious. Get everything in writing!

Geenie

Before you get scared witless OP by horror stories, do some research and find out if the property has a mortgage in the first place. Despite what is said on here about BTL, there are many LL's who are not up to their necks in debt and actually own the properties outright, or bought years ago and have little problems financially!

Go to the Land Registry, pay £6 and you will find out all the details.

Find out the history of the LL, ie has it been rented for many years or is it a recent addition due to the current climate.Go and talk to the neighbours, ie do everything that any sane person would do if buying a property before parting with their cash.