Cheap BTL needs Housing Association?

Reply to the comment left by Mandy Thomson at 13/02/2018 - 20:26Hi Mandy
I've just clicked on your link to the thread about Croydon Council's scheme, and there are some bad experiences cited on there by landlords who have leased to Councils.
The only experience I have of landlords actually leasing to Councils directly, was a few years back when a relative of mine leased a 2 bed house to their local council who then used it as temporary accommodation for homeless families. I believe the rent was about 80% of the LHA rate, but it was always paid by the Council, but after about 7 years the owner wanted to end the lease (fixed term had expired so this could be done), but when the house was returned with vacant possession there was a lot of repairs needed, i.e. far more than expected. The owner would not lease any property to this Council again.
With the properties I lease from private landlords, sometimes the landlords renew the leases, and sometimes they do not. Last year I had about six renewals, two non renewals due to the owner needing the property back for family members, and one where the owner refused to carry out structural repairs that he was contractually (and statutorily) required to do, so I had to end the lease early. As most of the landlords I deal with want to renew their leases with me for another 6 years then I guess I must be meeting their needs.
I am aware of Caridon Properties, in relation to the excellent work they do for some landlords in resolving Universal Credit issues, but I don't know anything about their leasing scheme, so I cannot comment on this.
When I looked into the Northwood guaranteed rent scheme, about 18 months ago, I found it to be quite restrictive in terms of what properties they would accept, what condition, what sort of tenants they would let to, etc, and when I started asking them awkward questions about their "guarantee" their answers were somewhat vague, and I could not get any clarification from them. However, they are a big company (franchise?) and the guaranteed rent scheme is highly publicised so I presume they must have many satisfied landlords across the country.
Why does your property owner wish to lease the property, why not just rent it out to professional tenants via a reputable letting agent on a full property management arrangement, perhaps backed up with rent guarantee and malicious damage insurance for extra peace of mind?

Reply to the comment left by Robert Mellors at 13/02/2018 - 21:53Thanks again, Robert. The lady wants to go abroad and has little experience of being a landlord, she currently lives in the property she proposes to lease.
She did try to let with a managing agent last year, and the agent found her a family (it's a large property). However, the tenant turned out to be a rogue and abandoned 3 months into the fixed term, taking several items of furniture and one or two white goods, as well leaving some damage and a mess with the utility company for the poor lady to get herself out of.
Another good reason for it to be leased is it could then be let as a HMO and will generate more income and attract more tenants. Very few good tenants want to rent the whole of a large house in London, at least long term.

Reply to the comment left by Mandy Thomson at 14/02/2018 - 07:42
Hi Mandy

I'm sorry to hear that she was ripped off by her letting agent, though I am sure there are some good letting agents around, it is difficult to know the good ones from the bad ones. Unfortunately, with letting agents, if the tenant fails to pay then the agent has not rent to pass on to the landlord, and if the tenant causes damage then it is up to the landlord to put right the damage (though of course they can try to recover this from the tenant, but often without success), so even with a good agent it remains the case that it is the landlord that is taking all the risks.

Leasing to a housing association (based on my own housing association's leasing scheme) should reduce the risks to the owner because the housing association would take on the responsibility for paying the rent to the owner even if they are not receiving any rent from their tenants. The housing association also takes on the responsibility of putting right any damage done to the property by their tenants, so even if rogue tenants go in, the owner does not have to worry about the state of the property as the housing association will pay to have the damage repaired. In addition to this, the owner would not have to worry about the problems of evicting bad tenants, as again the housing association would be responsible for evicting their own tenants and returning the property to the owner at the end of the lease term (or renewing the lease for a further term of course).

Mandy, if you would like to email me directly with the details of this property, I will make some enquiries and provide you with some possible options.

Do a search on this site for 'negative equity' or in the Financial Press for Carney/unbalanced economy, before deciding if this is really a good move.