My letting dilemma
I can’t begin to explain how fraught the last few weeks have been. Most part time landlords will identify with my situation. I present my stripped down raw dilemma faced day in and day out by landlords, which highlights the real difficulties in running a rental business with limited time and resources. I have had to make a decision and I have no idea whether it was right……only time will tell. Please feel free to give me your views and advice by posting your comments.
I’m setting up a new business. I have no time, literally NO TIME. To illustrate this I moved house in September and still haven’t unpacked a single box! Seriously not ONE! I’ve been trying to let my flat in Nottingham for months. Firstly I was hamstrung by the fact I could never clear the property properly to stage it in a way that was going to appeal to any prospective tenants. Then when I had moved it was moving into winter so now prospective tenants were presented with a cold empty flat. Not attractive in anybodies eyes.
My letting strategy over recent years has been to use a local letting agent to do the initial let which has cost me £200 (well worth it in my view). Once let I would then carry on with the ‘day to day’ management. It’s worked well for me. The letting agent snares the tenant. If I have ever had questions about the tenant I’ve been around to meet them and weigh them up. Previously I had not really had any problems letting any of my properties, but this one has really stuck despite having it redecorated and the garden cleaned up. At the same time of employing a letting agent I have supplemented them with the odd advert in Gumtree.
I did think the other day that I’d snared a tenant through Gumtree only for them to back out at the last minute. There’s a tale and perhaps an insight into the drawbacks of letting through Gumtree. The tenant has invested nothing in time or money in the process and probably is doing there best to avoid paying letting agent fees. A professional who is more cash rich and time poor is therefore more likely to come through an agent.
Two letting agents better than one?
Initially, I had one letting agent trying to let the property for me. I’ve known the owner of the business since he started as a one man band and they have always let properties very quickly. But this property …no takers! Could it be that there is too much choice now and too much competition. Maybe, but for whatever reasons my trusty maisonette was not resonating with the inhabitants of this up market suburb of Nottingham. A chance meeting in a restaurant with a coffee shop acquaintance who also runs an upmarket letting and location business in the area meant that I ended up with another letting agent and therefore another route to market. In hindsight I questioned whether this was such as good idea.
Are tenants like buses?
After going several months without a single tenant last week both letting agents popped up with a prized tenant. Now normally, I would have greeted this with yelps of joy. Particularly if it was clear that one was much stronger than the other. What I really wanted was a single, non smoking professional that was looking for a long-term let and couldn’t believe that they had got such a fantastic pad at a knock down rent. Bur instead I got:
Option 1. A young family who were shacked up in a hotel and wanted to move yesterday (a tad suspicious).
Option 2. A single girl who had just given up her full time job and was trading beauty products on Amazon.
Letting agent pressure
So then it began. Having lined up 2 competing tenants both agents started to promote the attractions of their prospective catches. If I had a ‘tenner’ for every time they espoused "I’ve met them they are lovely". Forgive me but I’ve been in this game too long to get swayed by initial impressions. What I need is a back story. I need to understand the tenants’ motivations and it needs to make sense. This is where I pressured the letting agents to dig deeper.
Once the letting references came through the situation became clearer:
Tenant one had been living down south and had been paying £900 rent and now was looking to pay £495 for my 2 bed maisonette. They had moved to Nottingham with his wife on maternity leave and the husband with contracting work with a local authority (I’ve never heard of this LA contracting out work before and as I used to work there I find it surprising). Meanwhile they are paying to stay in a hotel with a small child. To me this is not what you would want to do with a young family and it can hardly be cheap despite the letting agent maintaining that all this was cultural. The agent presented me with no real evidence of a previous landlords reference or employer reference and I was left feeling totally uneasy. If I had more time I’m sure I could have got to the bottom of it. But I really didn’t have it.
The second prospective tenant at least had a reason for moving. Clearly she was upgrading to a bigger place and one potentially where she could move in with her boyfriend. I can kind of understand that.
Tenant one for some reason I couldn’t.
So my dilemma was:
1. Did I turn down both tenants and in the process ‘p…s’ off both letting agents to the point that they gave up looking for new tenants altogether?
2. Annoy letting agent one or two by going with one of the letting agents tenants but not there’s
3. Delay the letting and potentially lose both.
Given that the place had been up for let for well over 4 months and heading into the Christmas season I was keen to get the property let. However, with my own advice ringing in my ears I was also dead certain that I didn’t want to let to just anybody to then have to face more problems further down the line.
The clincher for me was that tenant 2 was happy to find a tenant guarantor and with this in place I felt somewhat reassured. She also seemed happy to provide me with 6 months bank statements. All this was emailed through to me at the very last moment prior to the signing of the tenancy agreement at the end of last week. The letting agent was even going to allow the tenant to occupy without an inventory being completed! I had to put a stop to this and the property inventory is now in place.
The ‘fall out’
I have now had the credit checks and guarantor agreement and it’s all rather unsatisfactory. The guarantor whilst they may be in full time employment and have also lived in the same place for 20 years is also tenant; which is far from satisfactory (what you want is a homeowner with lots of equity to claim against). I would normally only accept a homeowner. The experience has highlighted to me the difficulties that many landlords face in dealing with letting agents. They are for the most part really just interested in getting the property let and then passing the problem on to the landlord. It also puts into sharp focus the difficulties of passing any responsibility for your letting business on to somebody else. They really don’t know for the most part as much as you do and they certainly care a lot less. I have been very lucky with the choice of tenants over the last 20 years. This has been due to a large part down to me being able to access the tenants personally. I hope that my luck continues but putting my business in the hands of others does not fill me with confidence. I’ll keep you posted but in the meantime please post your views and comments below.