Checks needed for DSS / LHA tenant?

Reply to the comment left by "tony salmon" at "24/01/2015 - 11:42":

Its all done through tasker

Reply to the comment left by "Mark Reynolds" at "24/01/2015 - 12:06":

mark i never mentioned anythink about tasker, i agree tasker, credit union etc is a good thing,gives landlord peice of mind that they are not responsible for any clawback, i personaly dont use these , but as the universal credit is rolled out more and more its somthing ive thought of doing along with other stratergies

Hi
I think you will get your hands burnt!
All London Councils can not cope with Housing LHA.
Your new tenant will only get 500 pounds per week total for living and housing.
They will not have enough to pay you at the end of the month!
Your Council will go on their side and tell them to stay in your property until you take them to court!
Then they might help them! Not you!
The government is cleaning and getting all the poor out of London!
The poor people do not get enough to stay in London!
I am a Landlord of 26 properties and this is what I see is happening at the moment!
I hope this advice helps!
regards
Paul

Yes, it's interesting how when we give this kind of advice, based on years of painful experience, it can be interpreted as mere negativity. Instead, I think we all feel the impulse to help others avoid the stress and even anguish that some of us have gone through when we have believed what liars tell us.
I never blame the victim; thus, if the OP gets ripped off I will clearly side with them and against the people who cheat him, but it would be good if he could take some of this advice on board. I made most of my mistakes in this business in isolation, knowing no other landlords and being unaware of any property forums. I think the novice landlords who get help from these forums are very lucky compared to what it used to be like for us more experienced landlords. It would be a shame if they didn't take heed.

Interesting debate ...

Ive been renting to the LHA sector for over 15 years . I get all my rents direct from Milton Keynes Council. The change came in April 2011 when the housing regs were amended and allowed direct payment in order to secure the tenancy or prevent eviction. I put that on my AST . I had to tell the council though as they were not aware. They apologised and its not been a problem since.. No need to use the vulnerability criteria anymore so this cuts out the time consuming evidential support letters which I used to have to provide .

BUT and its a big BUT . Its a regulation which isnt the same as law. So some councils choose to ignore it and they can do this legally as a matter of internal policy.

As for clawbacks if paid direct. Yes it can happen but you can challenge many of them and have their decisions overturned. Its not been a problem. Keep a good contingency fund reserve . Some appeals go on for months and months and you still have to pay the mortgage in the interim

LHA is a niche market and not for everyone. But dont see it as a black and white issue. That is shortsighted and discriminatory in my view. An LHA tenant is 24hrs away from getting a job. A working tenant is 24hrs away from getting a P45. Their personality doesnt change overnight if that happens. Look at the person not so much where the rent comes from. Despite its operational shortcomings the government is a very good rent payer. If you have a bad experience with an LHA tenant its often down to poor interview and selection.

75% of my portfolio is LHA. Its more complex and can be more intense management on occasions but sometimes the management is minimal as they are more self sufficient and less picky. You have to know your stuff though and be a good all rounder I do it because where I am the business case for LHA gives me in some case 50% - 100% more return than it would for a working tenant in terms of rent v capital outlay

The London boroughs are struggling with housing LHA . That`s why the likes of Harrow ring me up and offer me incentives to take their tenants.

Take the emotion out of LHA invest in the right areas and the LHA business model is a very successful one.

When UC comes around I will use my local credit union over Tasker. I am sure the government will learn from its failings in the pilot areas It cannot afford to alienate the PRS. We offer them a lifeline for their lack of house building and they will come around to our way of thinking eventually. But at the moment they dont want to lose face so IDS will plough on regardless.. After the election will be the time. Their manifestos will make interesting reading

Checks and more checks.
Once you are satisfied that the info supplied is real then I'd say go ahead. I have had my property trashed by HB tenants and lost money, and I've been renting out a property of mine to an HB tenant since 2007 with no issues.
It can be difficult, but all tenants are different. We just have to do the background work to hopefully make thing work for everyone.

Hi

I have been doing this a while and normally I don't mind whether a tenant is on benefits or working. You can get the same problems from tenants regardless.

I normally meet the tenants get a feel about them look on there social media sights to try get an understanding of them. (Facebook etc.) . I look for things like attitude to law drink drugs family etc.. As most of my tenants are local I ask about.

If I meet someone and they are out of their head on drink or drugs big no no.

I looked on Facebook about one prospective tenant there was a picture of about twenty vodka bottles along the kitchen top. His attitude to law was not nice. But the best pictures were a load of cash on the floor. him sitting there waving it about in his hands and another with a shoe box 3/4 full of twenty pound notes.

There was no way he was getting anywhere near my properties.

We all make mistakes and if it goes wrong deal with it. over all it has given me a good life now. Just don't take it personal I received both direct payment and indirect by my benefit tenants. I do have problems but far and few between.

If like you I feel good about the tenant then I let my property. It has gone wrong on a few occasion's but you deal with it some people just don't get a break in life and others abuse that break. you just never know.

Well I think this approach is okay if you have a lot of properties and won't get into trouble if you have one non-payer for 6 months (about the time it takes to get people out) and also if your nerves can take it.
I think it is a very good idea to check them out on Facebook though. I usually forget! But I did turn down one tenant when I saw his 'body building' and 'boxing' stuff and comments to his father about how much he hated him...

Reply to the comment left by "Rosalind " at "25/01/2015 - 13:44":

It softens the blow if you have multiple properties I agree but exactly the same could happen with a working tenant and therefore you should always have sufficient reserves in your contingency fund to deal with non payment whether you have 1 or 20 properties.

People have different views as to what % reserves against debt should be kept. Mark advises 20% of debt which for me is a bit too strong. But whatever figure you choose the % is the same. Tenant type and number of properties you have is largely irrelevant to that in my view
.

Oh yes, I agree it's not a matter of LHA versus working tenants. Our worst tenant ever was working - but in the tax-fee part of the economy - cash in hand - so we could never get an attachment of earnings on her after we got the CCJ. And there is an advantage with LHA tenants in that you can get the payments direct as soon as they're the equivalent of 8 weeks in arrears - I think you run the risk of losing more with working tenants actually, if you come across a bad one because you can't force them to hand their pay packet over and you have to play a long game to stand any chance of getting your money back.