Money Moral Dilemma: Should I reduce my furloughed tenant's rent?

Peter_Parsons

I don't think there is one simple answer to this one. I am a landlord and one of my tenants have approached me via my letting agents about a temporary reduction as one of them (a couple) is currently not working as they accepted a new job which then got furloughed before they started it. I've shared the details of their old employer being able to take them back on and furlough them (as it seems they were not aware of that possibility), but what we are currently discussing is a short term reduction in the monthly with a payment plan to make back the shortfall once everything gets back to normal. If you've got good tenants, my experience is that it pays to keep them, so being flexible in these times of difficulty for many people feels like the right thing to do.

mrpunk50

Heather_Bean said:

mrpunk50 said:

I've been lucky to have reasonably nice landlords, and now (thank God) I have managed to buy a house. However, this doesn't blind me to the fact that landlords are parasitic vultures. You artificially inflate the housing market in order to keep a monopoly on property and make profit off the fact that others cannot afford to buy. 
Every month, you take more than a quarter of this woman's wages (by your calculations, her wage is £3333/month, and the rent is £750). Then you have the audacity to wonder if she should budget better, so that you can carry on taking your cut.
In an ideal world, the vulture class of private landlords would be extinct.

I am a private landlord and to call us all 'parasitic vultures' is extremely unfair! 
The landlords may have a mortgage on the property (I certainly do) and may not be able to afford a cut in rent, however having said that IMO perhaps a compromise of a small rent reduction for 3 months, see how things progress. It would benefit nobody to have this situation escalate into tenants being homeless or landlords having a void.
When my tenants have a problem (whether slight or not) they come to me asking me to deal with this - I have never, ever refused to deal with something urgent, or even something as a faulty shower, (something that is not classed as essential as they have a bath). I have always taken the view that although it's not their house it is their home.
My current tenant had asked for rent payment date changes to enable him to pay more efficiently (which I agreed to....) and still cannot manage to pay on time every time. They have damaged items within the apartment, (cooker hob being one example,) and had the audacity to ask for a new living room carpet (to replace one that they have stained) in their chosen colour and for me to pay for it????   
If I was to 'tar' all tenants with the same brush as this the description would not be as nice as 'parasitic'.

Let's be very clear: my comments were not aimed at the personality of conduct of individual landlords. I'm sure you are a decent person, and I luckily had a landlord for 7 years who was very decent - never raised the rent unfairly, always fixed problems in the property swiftly. When I said that private landlords are parasites, I was taking a broad view of the fundamental economic role that landlords play.
          When we receive our monthly salary, 99% of us would like to pay for somewhere to live that will eventually belong to us. However, the cost of owning a home is driven up by landlords and investors, who effectively monopolise home-ownership for profit/investment. The majority of tenants would not willingly choose to hand over a large chunk of their wages to a landlord (sometimes 50% of their take-home pay) and receive zero long-term gain from that money. They are trapped in that situation by the landlord class, who have helped keep the cost of housing too high for the average salary.
          Of course, there will be no fundamental reform in this area, since an overwhelming majority of MPs are themselves private landlords with a vested interested in profiting from the sad situation of the UK housing market. However, private landlords can follow their own moral compass in determining whether they play an ultimately good or bad role in our society.  

mattyprice4004

No, you shouldn't.  

mrpunk50

Afourteen said:

mrpunk50 said:

I've been lucky to have reasonably nice landlords, and now (thank God) I have managed to buy a house. However, this doesn't blind me to the fact that landlords are parasitic vultures. You artificially inflate the housing market in order to keep a monopoly on property and make profit off the fact that others cannot afford to buy. 
Every month, you take more than a quarter of this woman's wages (by your calculations, her wage is £3333/month, and the rent is £750). Then you have the audacity to wonder if she should budget better, so that you can carry on taking your cut.
In an ideal world, the vulture class of private landlords would be extinct.

So I'm  a parasite am I???
In that case I'd better live up to your estimation and kick my tenants out! The same Tenants that didn't tell me they were in Financial difficulties some time ago and didn't say anything until it became clear that I wasn't getting rent from them. In total they missed some 5 months payments. They have repaid some of the missing rent - which by the way is over 20% down in real terms on what it was when they moved in. Do I expect to get it all back? hopefully but I'm not holding out much hope. During that time I've had the property redecorated, re-carpeted, upgraded the central heating and a new washing machine (cause they had a dodgy Indesit machine and I wasn't prepared to have that in the property once I knew of the issue). I still have to maintain the property in good repair and be responsive when there is problems.

Hopefully with now having your own property you find just how expensive it is to own a house and maintain it in good repair and comfortable to live in.

Yes, you are. I don't mean it as a personal insult, as per my post above. I mean it as an economic analysis of the role private landlords play in society. I agree that it is expensive to own a house. But this cost is driven up artificially by those who treat home-ownership as a moneymaking venture, rather than a basic need of all individuals. 
          Let's imagine I want to purchase a house in a small town. There are six other first-time buyers also interested in the property, and the market value of the house is determined by that demand. Now imagine that six landlords are also interested in buying the property and letting it out for profit. Obviously, the value of that property has been hugely inflated. Many of those first-time buyers will be priced out of the market, and will be forced to spend a few more years handing over a high percentage of their income to a landlord, whilst desperately trying to save the rest of their income to afford the £20,000 deposits which have become alarmingly common. Even those who are retired or nearing retirement (like OP's tenants), and are not actively looking to buy a house, will suffer from the fact that house prices (and therefore rent costs) have been driven up consistently over the past fifty years compared to the average UK salary.
          When you look at the specifics, many landlords are nice people who treat their tenants with respect. However, the underlying economic realty is surely that being a private landlord means profiting from (and exacerbating) the economic situation that tenants and prospective first-time buyers are trapped in. Rather than moaning about losing profit from missed rent, landlords in general should have some self-awareness of the role they actually play in our economy.

mrpunk50

thorpehesleyptw said:

mrpunk50 said:

I've been lucky to have reasonably nice landlords, and now (thank God) I have managed to buy a house. However, this doesn't blind me to the fact that landlords are parasitic vultures. You artificially inflate the housing market in order to keep a monopoly on property and make profit off the fact that others cannot afford to buy. 
Every month, you take more than a quarter of this woman's wages (by your calculations, her wage is £3333/month, and the rent is £750). Then you have the audacity to wonder if she should budget better, so that you can carry on taking your cut.
In an ideal world, the vulture class of private landlords would be extinct.

Sorry Mrpunk50, you're bang out of order. your comments are nasty and not in accordance with facts. Sure, bad landlords spoil it for the many decent landlords who want to help those who either can't afford to buy or don't want to buy have a HOME.

I used strong words to put my point across, but I am not trying to be nasty to any individuals. I am making an economic point about the landlord class as an economic whole. See my replies immediately above this. Let's not pretend that private landlords are offering some beneficial and philanthropic service to their tenants. Private landlords, whether they are nasty or lovely people, have helped to create the insanely inflated housing bubble we now live in. The idea that we should now mourn their lost profits during this national catastrophe is frankly absurd.

richieOrich

Perhaps a good thing to do, would be if the Landlord has a buy to let mortgage on the property, then apply for the 3 months mortgage holiday from their lender, and pass the saving onto their tenant

SassySara

It's a !!!!!!, !!!!!! situation we're ALL in atm. I have no direct answer, but I believe we should all be working together to get through this time. #staysafe

gary83

richieOrich said:

Perhaps a good thing to do, would be if the Landlord has a buy to let mortgage on the property, then apply for the 3 months mortgage holiday from their lender, and pass the saving onto their tenant

the 3 month mortgage holiday does not provide savings it makes the mortgage more expensive, the debt increases. 

aaaevans

NO, you shouldn’t reduce it.
You should not need to subsidise a couple who are better off than you

bvulc

I would not reduce the rental amount by any percentage unless the tenants have been impacted to such extent that they are going through genuine hardship because of the furlough which is not the case. It is at your discretion whether you want to show goodwill to them and reduce the rent. The fact that you earn less than them should not affect your decision and you should remain objective in your decision. As an alternative you can always go down the route of reducing the rent and apply for the 3 months mortgage holiday ... this way everyone is happy.