A few queries from a would be landlord

martindow

Why are you intent on asking for payment in cash? For me this raises questions about a LL not declaring income to HMRC, maybe not having permission to let from their mortgage company, avoiding some of their responsibilities and looking dodgy.

Why not get the tenant set up a standing order? It is not reasonable to ask tenants to get bundles of cash and have you disturbing them every month.

sandsni

It's not a good start to a BTL career if the OP is already in a position to need the deposit and rent in cash straight away. As previously stated, the deposit isn't your personal petty cash fund, it's the tenant's money from the moment they pay you to the moment they leave, unless you have good grounds for claiming all or part of it (AT THE END OF THE TENANCY). Where's your contingency fund for when repairs or maintenance of the property are required, never mind a rogue T trashing the place or not paying the rent for months while you go through the courts to evict them? What will you do if you have a void period of a month or two between tenants?

If you can't afford to go without the rent for a few months then you're getting into the wrong business.

flora48

With reference to the previous post I read somewhere on this site that a contingency fund equivalent to 6months rent is advisable. I have always stuck by this advice.

geek84

Hi Folks

Many thanks for your replies.

geek84

Hi Folks

Is taking 1 calendar month deposit sound ok to you or does it have to be 4 weeks rent?

Also, is it worth getting a guarantor? Because that doesn't really stop the tenant from not paying rent!

Thanks

Werdnal

It is normal in a monthly tenancy to take a 1 month deposit, although you can request more, particularly in instances where you allow pets for example, and you fear there may be additional cleaning/repairs/de-flea costs etc.

A guarantor is an additional insurance to cover missing rent and other losses created by the tenant, and can be valuable if the tenant's own credit checks are insufficient, they have no rental history (students for instance) or they are from overseas and references/credit checks are difficult to obtain. If tenant stops paying, you chase guarantor. If tenant leaves damage in excess of deposit, you chase guarantor, and so on.

Guarantor must be credit checked as thoroughly as you check the tenant, and must have sufficient assets and/or income to cover the tenancy. The guarantor must also be tied to the tenancy via a witnessed deed and be given a copy of the tenancy agreement in advance of signing, to ensure they have sufficient knowledge of what they are agreeing to guarantee. Failure to do this means guarantor is worthless and can wriggle out of their obligations if you have to sue them.

geek84

Thyanks Werdnal

Dan-Dan

geek84 wrote: »

Hi folks
I am in the process of purchasing my first BTL property.
I seem to understand the general procedure and responsibilities of a landlord,

That`ll be why after posting this , you have gone on to ask about a million of the simplest questions i have ever seen