Guaranteed rent through Company Let. How do we pay high street agent Letting fee?

Marvel1

Slithery said:

cherrytree123 said:

It is definitely the right property for large families

Then why haven't you had any offers?

Also why are you moving away if it's good?

HRH_MUngo

Marvel1 said:

Slithery said:

cherrytree123 said:

It is definitely the right property for large families

Then why haven't you had any offers?

Also why are you moving away if it's good?

The OP said they did not want to live on a busy road.

Marvel1

HRH_MUngo said:

Marvel1 said:

Slithery said:

cherrytree123 said:

It is definitely the right property for large families

Then why haven't you had any offers?

Also why are you moving away if it's good?

The OP said they did not want to live on a busy road.

Exactly my point.

Cakeguts

Marvel1 said:

HRH_MUngo said:

Marvel1 said:

Slithery said:

cherrytree123 said:

It is definitely the right property for large families

Then why haven't you had any offers?

Also why are you moving away if it's good?

The OP said they did not want to live on a busy road.

Exactly my point.

I asked this question ages ago. Because it is obvious that if the OP doesn't want to live there because of the awful position no one else will want to either.  They can't get a good type of tenant because no one wants to live where this house is they can all find somewhere better which is exactly why the OP is moving. There really only is one option and that is to sell the house.  They are never going to live there again because they don't like the location. No one else wants to live there because they don't like the location either so the only thing to do is to sell it to a developer who will turn it into either an HMO or an office or flats or probably demolish it and build flats in its place.  Demolishing it and building something else there would seem to me to the be the most sensible option for the position.  The house is going to become run down anyway because they aren't going to get good tenants there so there are always going to be issues with maintenance. They are likely to make a loss on the rental income so eventually the house will become like all the other undesirable run down properties that you see on main roads where no one wants them.  Round the corner from where I live there is a main road and over the years we have seen large detached houses on it deteriorate because people who can afford the upkeep don't buy them. They are only ever sold cheap to people who can't afford the size of house if it isn't in that location. Most of them are now being demolished and replaced with flats. 

HRH_MUngo

Cakeguts said:

Marvel1 said:

HRH_MUngo said:

Marvel1 said:

Slithery said:

cherrytree123 said:

It is definitely the right property for large families

Then why haven't you had any offers?

Also why are you moving away if it's good?

The OP said they did not want to live on a busy road.

Exactly my point.

I asked this question ages ago. Because it is obvious that if the OP doesn't want to live there because of the awful position no one else will want to either.  They can't get a good type of tenant because no one wants to live where this house is they can all find somewhere better which is exactly why the OP is moving. There really only is one option and that is to sell the house.  They are never going to live there again because they don't like the location. No one else wants to live there because they don't like the location either so the only thing to do is to sell it to a developer who will turn it into either an HMO or an office or flats or probably demolish it and build flats in its place.  Demolishing it and building something else there would seem to me to the be the most sensible option for the position.  The house is going to become run down anyway because they aren't going to get good tenants there so there are always going to be issues with maintenance. They are likely to make a loss on the rental income so eventually the house will become like all the other undesirable run down properties that you see on main roads where no one wants them.  Round the corner from where I live there is a main road and over the years we have seen large detached houses on it deteriorate because people who can afford the upkeep don't buy them. They are only ever sold cheap to people who can't afford the size of house if it isn't in that location. Most of them are now being demolished and replaced with flats. 

There are many houses like that in the town where I live - once grand large houses which are now run-down bedsits or offices.  The OP's house could easily end up like that if they go the HMO route, if they can't afford the upkeep.

cherrytree123

Thank you both.  For our council, an HMO needs a license if (1) it has five or more people, and (2) occupants form two or more households. So as you said, in our case for 3-4 people we won't need a license. 

But yes it'd still be an HMO, a small non-licensed HMO. The guaranteed rent company gave us a list previously of what they were planning to do (they wanted to do 5 bedrooms so would have needed a license), so we know what we need to bring the property up to HMO license standard (Firedoors with thumb turn lock, Fire blanket and extinguishers). We were hoping these are not mandatory for a smaller HMO...

cherrytree123

HRH_MUngo said:

What happened to the families who you said viewed your house?  Were they not interested?  IMO, these would be a better bet than an HMO (provided of course that they pass the referencing).

However....as Cakeguts mentioned - the right property in the right place is important.  I have a five-year-old two bedroom flat on an estate that is still being built. There are good bus, rail and motorway links and the estate is on a brownfield site so there are things like schools,doctors etc already in existence. 

My husband and I bought this flat purely to rent out, as a business transaction.  Therefore I have no emotional attachment to the property, it is purely an investment.

 I have advertised the flat twice through OpenRent.  The first time I had nineteen enquiries and the second time 25, within a couple of weeks.  Not all of these were progressed into a viewing (if they do not return the questionnaire I send them, or the replies are unsuitable, then they are not offered a viewing).   Even so, I think there were ten viewings the first time and five the second (because the second time  we found  suitable applicants halfway through the arranged viewings - I cancelled the others).  

I  know this flat is an entirely different type of property to your own and will attract a different category of renter - I just thought that you should have had far more enquiries than three if people saw it as a desirable let.

HMO is tricky, especially for an inexperienced landlord with sentimental feelings towards their property - I would not go there.

Thank you HRH_MUngo, I appreciate that. Both families have actually said they wanted to move in and are ready to give us the holding deposit via RentNow. But both probably won't pass tenant referencing. First one said they're self employed but won't pass affordability check as they're claiming Universal Credits of £1750/month, but then they're happy to show us their bank statements to prove they can more than afford the rent. We think that's a bit dodgy. We like the second family, they said their credit checks won't be great because of something stupid they did when they were younger, but their current landlord saw affordability check and references etc and was ok with it. We could do the same with them. I like this second family most and want to proceed with them, but my husband prefers the working professionals as they have a clean history and no pets (the second family have a big dog)..

With information above, would you still pick the family over HMO? Thanks again

Cakeguts

cherrytree123 said:

HRH_MUngo said:

What happened to the families who you said viewed your house?  Were they not interested?  IMO, these would be a better bet than an HMO (provided of course that they pass the referencing).

However....as Cakeguts mentioned - the right property in the right place is important.  I have a five-year-old two bedroom flat on an estate that is still being built. There are good bus, rail and motorway links and the estate is on a brownfield site so there are things like schools,doctors etc already in existence. 

My husband and I bought this flat purely to rent out, as a business transaction.  Therefore I have no emotional attachment to the property, it is purely an investment.

 I have advertised the flat twice through OpenRent.  The first time I had nineteen enquiries and the second time 25, within a couple of weeks.  Not all of these were progressed into a viewing (if they do not return the questionnaire I send them, or the replies are unsuitable, then they are not offered a viewing).   Even so, I think there were ten viewings the first time and five the second (because the second time  we found  suitable applicants halfway through the arranged viewings - I cancelled the others).  

I  know this flat is an entirely different type of property to your own and will attract a different category of renter - I just thought that you should have had far more enquiries than three if people saw it as a desirable let.

HMO is tricky, especially for an inexperienced landlord with sentimental feelings towards their property - I would not go there.

Thank you HRH_MUngo, I appreciate that. Both families have actually said they wanted to move in and are ready to give us the holding deposit via RentNow. But both probably won't pass tenant referencing. First one said they're self employed but won't pass affordability check as they're claiming Universal Credits of £1750/month, but then they're happy to show us their bank statements to prove they can more than afford the rent. We think that's a bit dodgy. We like the second family, they said their credit checks won't be great because of something stupid they did when they were younger, but their current landlord saw affordability check and references etc and was ok with it. We could do the same with them. I like this second family most and want to proceed with them, but my husband prefers the working professionals as they have a clean history and no pets (the second family have a big dog)..

With information above, would you still pick the family over HMO? Thanks again

You are correct neither of the families would pass a credit check. The first one because they are claiming universal credit in that amount makes me think that they are not really doing much actual paid work or it is very on and off.  With that there is a high risk of them deciding not to pay the rent one month. Usually around Christmas.

The second one has some sort of default that they haven't paid off and a dog. They won't care if the dog damages the property because they probably don't have any money hence the possibly still  outstanding defaults. 

What you have are 2 sets of tenants that experienced landlords would look at as high risk.  Do you know why they are moving? 

A 3rd set the sharers will cost you money because the HMO rules apply to all HMOs not just the ones that need to be licenced. There is also nothing to stop your local council from extending its licencing to include small HMOs as well a bigger ones.  Lots of councils have already done this.

High risk means possible rent arrears and you having to take them to court to get possession and possible serious damage to the property.  This doesn't matter as long as you budget for spending £1000s on the property in repairs between each let and you also budget for not getting any rent for 9 months while you seek possession through a court.  If you want to see what high risk means watch a few episodes of Nightmare tenants.  You need to concentrate on the episodes where people have let property to tenants who are high risk from the start so that you can see what happens when it all goes wrong. 

The position of your property increases the risk of it all going wrong because you are only going to get applications from tenants who are finding it difficult to get somewhere to rent because there are problems with them. If they didn't have these problems your house would be the last one they would want to live in.

My business model wouldn't accept any of your tenants because they are all too high risk for it.

cherrytree123

Thanks Cakeguts. First family say they have a successful construction business overseas and can show us their bank statements, but we don't trust them because they shouldn't be claiming universal credits if they're well off as they say. We will ask the second family why they have a bad credit history - they seem open and honest. Both families want to move to a bigger house as their families are growing. 

The 3 young professionals seem really nice, 2 men 1 lady. They are polite and dont look the loud party type. They want to find their own place because in the current houseshare there is no reception, only kitchen, and sometimes you get a new tenant who isn't too clean etc. They have been there 2 years, they met there and know they get along so now want to find their own place

cherrytree123

So our house has been on the market for 5 weeks now. Through the agent, we had 4 viewings all were rent to rent companies, 2 of which had made offers. The company we were interested in actually ended up offering 2,350/mth (£350 above asking price) when we said we can't do this because commercial mortgage rates are too high. So they really want the house. We think this house is a good HMO if we target the right type of tenants, like these 3 professionals we just met.

Not sure if it's a good family let though. We didn't get my viewings through the agent (as said not sure if this was because they wanted to push us down the guaranteed rent route because they get double money that way). But we have advertised for 9 days now ourselves and have only had 2 family viewings. Both wanted the house, but both come with risks. 

So based on stats above and emotions aside, would you consider our house a good 'investment' property?

We love our current house and arent running away, we've been here 12 years. We were told by the estate agent last summer the house would let out easily so we thought this would be a good investment. We finally found another house we like (now close to exchange stage) it is lovely too and with time and a bit of money we can make it as nice as our current home (and yes in a better location). But we can't afford to keep both houses if this current home is going to be a problem  let. In which case we would choose to stay where we are and find a smaller property in a better location for investment.