A Student Landlords Lament | Discuss

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A Student Landlords Lament
17/02/2014
2:51 pm
StudentLandlord
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Guests

All tenants were students and their guarantors refused to pay the rents when the tenants stopped paying. None of them have replied to any communication I have made with them.

 

I have now uploaded these tenants onto the Landlord Referencing system and here are more details:

 

One went to Australia before her contract finished. She told the other tenants that she has no intention of paying the last couple of month’s rent and would not communicate with me on her return.
One refused to pay her last month’s rent. We contacted her and her guarantor over 10 times and eventually her phone was disconnected so we could not follow up the bad debt
One refused to pay all his rent and left the room with over 20 bags of rubbish in it. We had to pack up all the rubbish and dispose of  dozens of  bottles of urine with had been left around the room. We replaced both the carpet and underlay & bed as they were so dirty.
One promised to pay his rent on countless times but eventually left owing over two months rent and changed his phone number. He did not leave a forwarding address and would not reply to emails.
One gave me a false guarantor. When I rang the guarantor to check he was genuine before starting and he appeared to be but when we asked him to pay the rent as it was overdue he had no knowledge of saying he would guarantee the rent. He left without notice and we were unable to trace him afterwards. His room was not clean but it was not too difficult to re-instate it after he left.
17/02/2014
3:25 pm
Mary Latham
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I'm really sorry to hear your story.  My own experience of letting to students is that they always pay even if they leave the property needs a good clean up.

Did you get the guarantors to sign a Guarantee Agreement before signing the AST?  If you did you can do a money claim on line against them.  Did you do a full credit check on them to ensure that they were good for the money?  If you took a verbal guarantee it was probably one of their friends and in any event would not be enforceable.

 

I feel your frustration but it is important to get it right before the tenancy begins and to take action to recover your losses afterwards otherwise word will go around the uni that you are a soft touch.

 

---------------------

 

Follow me on Twitter@landlordtweets  

The perfect present for property investors @ £4.64. My book, where I warn about the storm clouds that are gathering for landlords is available on Amazon title.  Property For Rent – Investing in the UK: Will You Survive the Mayhem? 

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18/02/2014
9:38 am
StudentLandlord
Guest
Guests

Hi there,

Out of 210 students we only lost .2% of our total income due to bad payers – .2% too much but not too had.

This last year we had students who either fraudulently supplied guarantors (by filling in the form and pretending their parents filled it in) or guarantors who then said that they would not pay their children’s bad debts. Some of these parents are totally fed up with their children because they have behaved so badly. I’m not sure what you mean by Guarantee Agreement as I have only just started landlord referencing. We do not do full credit checks on all our guarantors but may consider doing so in future.

I don’t think that word has got round that I am a soft touch. We will not supply a key to their room until we have received a genuine guarantor from all tenants or a full year’s rent in advance now!

Although we do not check the credit check we do ring parents if we are concerned to make sure they will and are able to pay the rent if need be.

If I paid £9 per check (is that how much it is?) then the cost is almost .2% of my income so not really worth all the trouble.

 

Best Wishes

 

StudentLandlord.

18/02/2014
12:50 pm
Heritage Estate Agents
North Somerset/Bristol
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Studentlandlord, Mary has given you some good advice.  I dont know if you are a soft touch or not, as I dont know you, but with some tenants, give an inch and they will take ten miles.

I dont do student lets any more as my business is located well out of the area to make it feasible, plus to be fair I dont want to get involved in it again.  However, why on earth are you not purchasing a rent guarantee policy for them?  Even if it means employing a letting agent to find you tenants and reference them, plus chuck in a rent guarantee policy as well.  You can even get RGI with a guarantor referenced, and it will stop dead all this ball ache you have had.

Personally I cant stand using guarantors, they hardly ever fulfill their commitments, and most of them try and wiggle out of it by saying they only said they would stand guarantor for the first six months of the tenancy, even though its made obvious to them in the tenancy agreement that its for the duration of the whole tenancy - no matter how long that is.

It also makes me feel sad that these people are are future leaders, capitains of industry etc .............

Cathy

http://www.heritage4homes.co.uk

18/02/2014
3:54 pm
Simon_lets
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Guests

I run a student letting agency with around 500 tenants.

 

i recommend referencing guarantors, and getting guarantor agreements, executed as a deed.

 

as to insurance, for my business it's not worth it unless you pass on the cost.

 

We charge around 10 - 12.5% for full management.  12 months insurance for a guarantor is around one weeks rent for the students, or 2% of the annual rent, or around 20% of our management fee. So if we paid it, we'd reduce our fee to 8%, from 10%.  Our annual cost would be approximately £30,000 in insurance.  We do not have this level of arrears, so a no brainer.

18/02/2014
4:41 pm
Martin & Co Norw
Guest
Guests

Here's a question..... If you owned a £250,000 Bentley Continental would you attempt to drive it without having passed your test, at 100mph, at night, down an unlit country lane, without the lights on, wearing sunglasses and no insurance? If the answer is no, then why risk your equally valuable property in the same way? Student letting demands even more care and attention than professional lets. As a minimum:-

1) One single joint and several agreement - all tenants to sign.

2) A signed form of guarantee from each of the guarantors - UK based guarantors only.

3) Full reference & credit checks on all parties, i.e. each of the tenants and each of the guarantors.

4) Proof of address and proof of identity for all parties.

5) Two months rent equivalent as a security deposit.

6) Independent Inventory with Check In & Check Out.

7) Regular Property Visits.

And taking 12 months rent in advance definitely does not negate the need to undertake all of the checks. For example, if your rent is £1500 pcm; £18,000 doesn't go very far when your uninsured Bentley Continental gets wrapped around a lamp post.

 

18/02/2014
7:11 pm
Mary Latham
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A guarantee is only as good as the guarantors ability to pay.  If you do not check

1. That the guarantor is good for the money

2. That the person signing the Guarantee is actually the named guarantor 

there is really no point in having a guarantee and you might just as well take the risk.

I do a full credit check on guarantors.  I send the guarantee to their home address and ask them to sign but not date the agreement.  When all the guarantees are in I sign the AST and date that and the guarantees the same date so that they form part of a set of legally enforceable documents.  The guarantor agrees to cover "all the obligations of the tenant known as................ during the term of the tenancy of 6 some street." I also ask for a copy of an official document which shows their signature to be returned with the signed document.

If you give a student the form to get their parents to sign it you will find that their friends have saved their parents the trouble and it will not be enforceable.

After 42 years of letting several properties to students I have only had one person who did not pay. That guarantor had a change of personal circumstances during the year and had no assets worth chasing.

The return on a student let is so high I don't mind spending a few pounds to ensure that I get my rent. My reputation for chasing my rent is known at the University but so is my reputation for providing high standard properties that are well managed and being fair to the young people who I choose to house. I never have a void.

Many parents don't like having to guarantee their adult children but if they don't trust them enough to do that then I don't trust them enough to rent one of my properties - when one of a group tell the others that their parents won't sign, peer pressure usually brings about a good result.

 

---------------------------------------------

 

Follow me on Twitter@landlordtweets  

 

The perfect present for property investors @ £4.64. My book, where I warn about the storm clouds that are gathering for landlords is available on Amazon title.  Property For Rent – Investing in the UK: Will You Survive the Mayhem? 

Follow me on Twitter @landlordtweets

19/02/2014
11:17 am
Martin & Co Norw
Guest
Guests

Mary, couldn't agree more - we generally insist the guarantors come into the office with their offspring on the day of sign-up. That way we can verify their Id/proof of address etc and sign-up only takes place, of course, when all references are back and approved by the landlord. Ok, it can get pretty crowded in here on the day, usually 4 students, sometimes up to 8 parents, assorted siblings and cousins but its definitely worth it. Not least because we can have one single pep-talk about what is expected of them vis-a-vis behaving in a tenant like manner.

This all sounds somewhat draconian but as you well know from your own experience, if you set strict boundaries/requirements you end up with decent tenants and guarantors who appreciate the value of having a good property to live in.

BTW we always ask to see the individual's student card or offer letter, as appropriate.

 

22/02/2014
11:46 am
LyndonBaker
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Heritage Estate Agents said
Studentlandlord, Mary has given you some good advice.  I dont know if you are a soft touch or not, as I dont know you, but with some tenants, give an inch and they will take ten miles.

I dont do student lets any more as my business is located well out of the area to make it feasible, plus to be fair I dont want to get involved in it again.  However, why on earth are you not purchasing a rent guarantee policy for them?  Even if it means employing a letting agent to find you tenants and reference them, plus chuck in a rent guarantee policy as well.  You can even get RGI with a guarantor referenced, and it will stop dead all this ball ache you have had.

Personally I cant stand using guarantors, they hardly ever fulfill their commitments, and most of them try and wiggle out of it by saying they only said they would stand guarantor for the first six months of the tenancy, even though its made obvious to them in the tenancy agreement that its for the duration of the whole tenancy - no matter how long that is.

It also makes me feel sad that these people are are future leaders, capitains of industry etc .............

Cathy

http://www.heritage4homes.co.uk

Cathy, feel free to pass any student landlords to me! Happy to give them our February deal at any time!

BRPL asks for ID and proof of residence from the Guarantors as if they were the tenants. After all legally they are one and the same if the student defaults! They also sign a Deed of Guarantee. The usual argument is that they only want to be liable for their child's share. We then patiently explain to them that the tenancy is on a joint and several liability basis and their "share" could be the whole rent. The only problem we have had from a Guarantor is for a benefit tenant. Frown

 

Please remember our Landlords offer has been extended to 28th February 2014 and BRPL always give discounts etc to LRS members.

 

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