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Should I accept a tenant on low income?

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Comments

  • silvercar said:
    How secure would it be having a guarantor? 
    You check the guarantor as seriously as you credit check the tenant.

    Though I did once have a guarantor (excellent credit check, working full time, property owning) guaranteeing their daughter’s rent. Within two months of daughter starting the tenancy the parent had sold up and emigrated. Not much chance of chasing a debt the other side of the world!
    When I was training for my ARLA Advanced exams we were told that guarantees are not worth the paper they are written on.  Fortunately we never had to approach a guarantor.  If the guarantors won’t/can’t pay then the LL will have to take them to court and we all know how long that can take.

    no one has mentioned the “dreaded” term housing benefit (or whatever the equivalent is these days).  I found that some of our best tenants were those on housing benefit.  I understand the tenant can ask for it to be paid to the LL.   
    It's UC now and they don't like to pay it to the landlord unless there is risk of default. The problem with that mainly is, they pay in arrears, they don't always pay all the rent and if they pay it to you directly and the tenant was claiming incorrectly then they will come after the landlord for the money. 

    People on benefits are not worse people than those with money, it's just the government make it unappealing to take them.
  • silvercar
    silvercar Posts: 46,925 Ambassador
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    silvercar said:
    How secure would it be having a guarantor? 
    You check the guarantor as seriously as you credit check the tenant.

    Though I did once have a guarantor (excellent credit check, working full time, property owning) guaranteeing their daughter’s rent. Within two months of daughter starting the tenancy the parent had sold up and emigrated. Not much chance of chasing a debt the other side of the world!
    When I was training for my ARLA Advanced exams we were told that guarantees are not worth the paper they are written on.  Fortunately we never had to approach a guarantor.  If the guarantors won’t/can’t pay then the LL will have to take them to court and we all know how long that can take.

    no one has mentioned the “dreaded” term housing benefit (or whatever the equivalent is these days).  I found that some of our best tenants were those on housing benefit.  I understand the tenant can ask for it to be paid to the LL.   
    It's UC now and they don't like to pay it to the landlord unless there is risk of default. The problem with that mainly is, they pay in arrears, they don't always pay all the rent and if they pay it to you directly and the tenant was claiming incorrectly then they will come after the landlord for the money. 

    People on benefits are not worse people than those with money, it's just the government make it unappealing to take them.
    The upside is that they are not going to lose their job if they are living solely on benefit. I have had one tenant for 17 years on benefit. The rent is below market rates, but the council pay direct 4 weekly in arrears. That may be a downside, but I have had no gaps between tenants and they keep the property well. There was a time when they were paying direct and got into arrears, but the council agreed to pay direct after that, so the rent is relatively secure. 
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  • saajan_12
    saajan_12 Posts: 3,612 Forumite
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    silvercar said:
    How secure would it be having a guarantor? 
    You check the guarantor as seriously as you credit check the tenant.

    Though I did once have a guarantor (excellent credit check, working full time, property owning) guaranteeing their daughter’s rent. Within two months of daughter starting the tenancy the parent had sold up and emigrated. Not much chance of chasing a debt the other side of the world!
    When I was training for my ARLA Advanced exams we were told that guarantees are not worth the paper they are written on.  Fortunately we never had to approach a guarantor.  If the guarantors won’t/can’t pay then the LL will have to take them to court and we all know how long that can take.  
    Indeed MANY guarantees are worthless because they're poorly written. That doesn't mean they can't be correctly written and executed as a deed. 

    If anyone doesn't pay then you have to take it to court - whether a tenant or a guarantor. For a tenant you might have an extra threat that you'll evict them so they might be more likely to pay, but once it gets to arrears, its the same hassle / cost / time for the court process. 
  • Herzlos
    Herzlos Posts: 14,679 Forumite
    First Anniversary Name Dropper First Post
    If they have the savings to cover it, then could you accept 6/12 months rent up front?
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