Cant Rent without a garuntor. Despite 50k income.

trevormax

LTNRW said:

I understand that from A LL Perspective that they obviously want minimum risk.

But a garuntor on 25k.. is likely still paying their own rent or mortgage. And in my case..
If my garuntor met their 25k criteria would earn less than half than the actual tenant 
Makes no difference, it is a second person to chase for owed money. Two chances to get that rent is better than one.

That is what I cant grasp

tenant  on 50k offers for example 6 months in advance on a 12 month initial tenancy. Plus bond and supplies credit and employment references etc.
And some time in that first six months, tenant loses their job and can not pay for the remaining six months. But there is a guarantor available who may not have lost their job and they now get to pay the rent. 

The garuntor on 25k is paying their own mortgage etc..and therefore has limited disposable Income left 
That's the guarantors problem. They signed up to take the hit if the tenant fails to pay. 25k seems like a reasonable amount. How many people are going to be on 50k and willing to be a guarantor? probably less than the number of people on 25k. In my entire ciurcle of friends and family, I probably only know one person on 50k, but I know a lot on 25k. 

Surely it would be just as hard if not harder to chase the garuntor for missed rent than the tenant.
Maybe. Maybe not. Maybe the guarantor does not want any black marks on their credit record. Maybe the tenant (who doesn't care about the LL's financial problems) will feel bad about causing the guarantor financial hardship and will find the rent somehow. 

Worst case you end up in court suing a garuntor with such low income that they simply can't pay.. meaning yoire no better off as a Ll Than you would have been by taking the tenants to court directly and starting evictions..
A less "worst case scenario" is the guarantor stumps up the unpaid rent. Another way to look at it is, if there is no guarantor on 25k, worst case scenario, the tenant loses their income, doesn't pay, and there is no second avenue to chase that unpaid rent. 

I may be wrong. And happy to be corrected.
I've never rented or been a landlord but to me a blanket garuntor requirement doesn't make sense..
Makes perfect sense, considering the recent pandemic issues, the difficulty evicting tenants, and the fact that it appear to be a LL's market based on what you say in your OP. A LL would have to be mental to not consider stipulating a guarantor is in place. It is a sensible business decision to mitigate a possible loss. 

Its like a footballer renting a 35k a month mansion and the EA asking him for a garuntor who earns at least 50k.. 
Not really. A LL would be foolish asking for a guarantor on 50k/year for a place that costs 35k/month. If it is £700/month to rent, then 25k/year is a good figure. 

Sorry, but it makes perfect sense. It's not nice that the LL is doing this, nut it does make sense. If there are lots of possible tenants and a few of them will get a guarantor, then the LL is being smart to ask for one. 

LTNRW

Unbelievably no

Either £25,000pa 
Or homeowner
..
Obviously both id imagine is advantageous..

LTNRW

trevormax said:

LTNRW said:

I understand that from A LL Perspective that they obviously want minimum risk.

But a garuntor on 25k.. is likely still paying their own rent or mortgage. And in my case..
If my garuntor met their 25k criteria would earn less than half than the actual tenant 
Makes no difference, it is a second person to chase for owed money. Two chances to get that rent is better than one.

That is what I cant grasp

tenant  on 50k offers for example 6 months in advance on a 12 month initial tenancy. Plus bond and supplies credit and employment references etc.
And some time in that first six months, tenant loses their job and can not pay for the remaining six months. But there is a guarantor available who may not have lost their job and they now get to pay the rent. 

The garuntor on 25k is paying their own mortgage etc..and therefore has limited disposable Income left 
That's the guarantors problem. They signed up to take the hit if the tenant fails to pay. 25k seems like a reasonable amount. How many people are going to be on 50k and willing to be a guarantor? probably less than the number of people on 25k. In my entire ciurcle of friends and family, I probably only know one person on 50k, but I know a lot on 25k. 

Surely it would be just as hard if not harder to chase the garuntor for missed rent than the tenant.
Maybe. Maybe not. Maybe the guarantor does not want any black marks on their credit record. Maybe the tenant (who doesn't care about the LL's financial problems) will feel bad about causing the guarantor financial hardship and will find the rent somehow. 

Worst case you end up in court suing a garuntor with such low income that they simply can't pay.. meaning yoire no better off as a Ll Than you would have been by taking the tenants to court directly and starting evictions..
A less "worst case scenario" is the guarantor stumps up the unpaid rent. Another way to look at it is, if there is no guarantor on 25k, worst case scenario, the tenant loses their income, doesn't pay, and there is no second avenue to chase that unpaid rent. 

I may be wrong. And happy to be corrected.
I've never rented or been a landlord but to me a blanket garuntor requirement doesn't make sense..
Makes perfect sense, considering the recent pandemic issues, the difficulty evicting tenants, and the fact that it appear to be a LL's market based on what you say in your OP. A LL would have to be mental to not consider stipulating a guarantor is in place. It is a sensible business decision to mitigate a possible loss. 

Its like a footballer renting a 35k a month mansion and the EA asking him for a garuntor who earns at least 50k.. 
Not really. A LL would be foolish asking for a guarantor on 50k/year for a place that costs 35k/month. If it is £700/month to rent, then 25k/year is a good figure. 

Sorry, but it makes perfect sense. It's not nice that the LL is doing this, nut it does make sense. If there are lots of possible tenants and a few of them will get a guarantor, then the LL is being smart to ask for one. 

So how does it affect that scenario if the tenant paid the entire tenancy up front? 
Which I am in a position to do..

Or does the tenancy term to paid ratio not matter? What I am getting at is if on a 12 month tenancy the tenant pays upfront all 12 months plus deposit. 

Is there still a risk to the landlord ( outside of the obvious not moving out at month 13 )
But thats a risk no matter who or where or what surely?



Genuine question by the way. Not being obtuse

trevormax

If the tenancy ended after the twelve months with a guarantee that the tenant would leave at the end of it, then that would be fine as there would be no risk to the LL.
But after the first 12 months, the tenancy doesn't end and the tenant does not have to leave, it just moves to a rolling monthly tenancy, or the LL/Tenant arrange a new tenancy.
 
If, after that 12 months ends, the tenant can not pay the ongoing rent and the tenant refuses to leave, the LL is screwed, unless he has a guarantor.

Btw, I'm not siding with the LL. I'm not a tenant or a LL my self, just looking at the situation from the outside. 

LTNRW

Surely as a businesses which is really what a LL is... 

Then there's always an element of risk.
And if tenant can demonstrate that they can afford your property, provides payslips, bank statements, p60s to the agent, undergoes credit referencing and offers to pay a whole tenancy term upfront.. then thats about as little risk as a landlord could face? 

Yes clearly any LL would like a crystal ball to make sure a tenant moves out when they said so. Or when required. And always pays on time and never has a change of circumstances.

But that is the risk they take on as LL..and as crystal balls aren't around.. id say the above is pretty good going.. 

trevormax

There is always a risk. Having a guarantor halves the risk (or doubles the options to recoup unpaid rent)

Being financially sound NOW does not mean you will be in 12 months. You could be your imaginary footballer now earning 100k/week, and broke in a month.  
 

Gavin83

Whether the renter can afford it or not it does make sense to have another avenue of recovery should the rent not be paid. 

We’re in a situation where the law is very biased towards the tenant. In many ways this is obviously good for the tenant but in others it’s bad. It leads to less rental property being available and landlords covering their back more. 

I expect this’ll only get worse and we’ll end up in a situation where it becomes harder and harder to rent.

rexmedorum

LTNRW said:

AdrianC said:.
I just found it odd that a LL or EA would turn down an applicant who would willing to pay the entire contract up front to secure the property.. 

Offering to pay the whole contract up front is a huge red flag apparently as it leaves them wondering what will happen after the contract.

CKhalvashi

rexmedorum said:

LTNRW said:

AdrianC said:.
I just found it odd that a LL or EA would turn down an applicant who would willing to pay the entire contract up front to secure the property.. 

Offering to pay the whole contract up front is a huge red flag apparently as it leaves them wondering what will happen after the contract.

Not sure how that works unless they've got a crap agent telling them this.

The agent may not be AML supervision registered if this is the case, meaning they may not be allowed to accept 12 months upfront (not 100% sure on this one), but this is likely to be more the case if working as a lettings only business. Just saying this to the LL should be enough, but they may be wishing to hide it.

[Deleted User]

The law affords a level of protection to all tenants, which I know is well meaning, but an unfortunate consequence of this is that certain tenants can go years without paying rent before eviction is authorised by courts.

I'm sure I was reading an article just this week on BBC that some tenants are only now eventually being evicted with debts ranging from thousands to hundreds of thousands.

This may be a relatively small percentage risk, but the impact is so great if it happens that it cannot be recklessly ignored by a competent landlord in vetting applicants.

A problem is that some in the media, and the likes of certain charities who campaign for tenant rights etc, have a inherent hatred for landlords. You'll only hear about proposals that stick it to landlords, never looking at it from the point of view of how laws favourable to good landlords can actually better support good tenants. 

So it's inevitable that landlords put more conditions in place where they legally can, and equally sad that someone with a good income but no guarantor, cannot proceed to a tenancy.