Perfect tenant of 6 years turns heroin addicted prostitute – EVICTED!

Now we are all wise. You should have served notice when he left and re referenced her. I did take a guarantor in similar circumstances.It was forged by the tenant. The named guarantor came round and stabbed the tenant who did not return.

Hi Mark I just left a posting on landlords insurance and the fact that a lot of th Co's only offer £5000 cover on Malicious damage. Having seen this post 23 skips would be close to £5000 + labour cost for removal, cleaning, new carpets >kitchen etc. I would have had to take out another mortgage to cove the extra cost. I pay a larger premium to have all malicious damage covered.

Thank you for all your invaluable advice, you have inspired me and I have today had 2 offers accepted on properties in my area.

Yes yours was a salutary lesson; I've been done far worse than you as you know!
But of course you were able to cover things until you had a tenant in paying rent.
However the situation would have been very different if you had been a small LL with negligible funds.
Could you imagine 8 months or was it 18! months of missed mortgage payments.
You would have been repossessed and possibly bankrupted.
Which is why I don't care if the prospective tenant is a millionaire; I'll have an RGI policy on them; thankyou!
At least until I was in your position when I could cover losses with other cashflow!!!
I think there is a definite difference between small LL who max themselves out and LL such as you who leave sufficient or have sufficient reserves to cover things if it all goes wrong.
When you think about it for 5 properties it would only cost £495 to cover rent of say £60000.00 per year at £1000 pcm.
To me that would be a bargain.
I don't know at what point a threshold would be reached when a LL could dispense with RGI.
Even with 10 properties I would pay £990 for 10 RGI policies.
After all that is only £8.25 monthly per property to cover a rent loss of £1000 pcm............................peanuts in the overall scheme of things!!

The perfect antidote to all the get rich quick in property schemes and gurus!

They rarely, if ever, mention the fact that our customers (tenants) are people and people can sometimes behave in an unpredictable manner and sometimes behave in ways that we could never imagine, because we don't behave like that.

Although horrific, it is important to tell this story. Not just because of the emotional and financial stress caused by this tenant, but also how you dealt with it, got the property sorted asap, and continued to move forwards in a positive manner.

In 10 years of landlording, I have only encountered two bad tenants, but, if you don't know the pitfalls, you cannot avoid them.

The month of June is "Tenant referencing month" on Property Tribes with content and discussions to help landlords understand how to never experience a bad tenant .... because the best way never to experience one, is never to let one step over the threshold of your property in the first place.

Vanessa is so correct.
Perhaps if all these GRQ bods advised of the issues with tenants before they even started selling the dream then they might be genuine people!
But of course that would rain on their parade!
The last thing they would wish to do is advise wide-eyed prospective LL about the tenant issues.
They prefer to mention everything else about property apart from the inherent risks of the business model.
Basically the dependence on a tenant to sustain that model!
It seems to me that such tenants are almost an afterthought; as though they are a given to sustain that business model.
A chain is only as strong as it's weakest link.
Tenants are the weakest link in the property investment chain!
Something very few LL seem to appreciate.
For any investment; the investor should know about the risks they are taking and yet I believe so many invest in property without any understanding as to their vulnerabilities to a wrongun tenant; I know, because I was one of them about 7 years ago!
So a true understanding by any existing LL or prospective LL of the full issues that tenants can cause is vitally necessary if you are to be successful in the LL business.
If a LL fails in his business due to a wrongun tenant at least if the LL was aware of the risks then he has nobody else to blame apart from himself.
Life is all about risk taking; investing in property as a LL without understanding or appreciating such risks that a duff tenant can cause without appropriate measures being taken is foolhardy to say the least.
But it is down to the individual what risks they choose to take.
Nobody can say whether the level of risk someone chooses to take is correct; it is a personal choice.
I question how many LL are actually aware of the possible ramifications of this personal choice they make!

Shame that the law does not protect the Landlords more so when a problem such as this arises, These sort of ppl should be Jailed for what they have done, Them being addicted to Drugs is no excuse, Feel for you mate and lets just say its a lesson learnt and in future always have Guarantor

@Indy - she was jailed 🙂

As for guarantors, hand on heart answer me this question. Two professionals, one an accountant, both earning good money, fantastic references, RGI available without a guarantor. Would you ask for a guarantor?

If you did and they said "you must be joking, why would we need one" what would your answer be? Would you risk losing them in the hope of finding an even better set of tenants and incur a void whilst you try?

Now wind the clocks forward 5 years and they get divorced having been model tenants. Would you serve notice or ask for a guarantor at that point?

That's pretty much what happened in this case.

OK, with the benefit of hindsight this is the one deal I should have purchased RGI for. However, I would I know which one to pick? I have a large portfolio of properties and hundreds of tenant came and went over that six years. I don't have a crystal ball so I never know which ones will turn out bad.

If I had purchased RGI on all of my tenants and properties over that period I would have spent more on RGI than this particular problem. It's for that reason I can be philosophical about this incident.

If I was in a similar position to Paul Barrett I would but RGI all the time.

At the end of the day it's a numbers game.

Here's a thought on the subject of rent guarantee insurance:

I'm a letting agent (established ten years and managing many hundreds of properties).

I also have my own modest portfolio in my local area which (as you'd expect) I let and manage through my own agency.

Now let's face it, if anyone is best placed to avoid problem tenants in the first place its me. Equally, if despite this I do find myself with a problem tenant I've got all the professional knowledge and all of the resources of my agency available to me at little or no direct cost to resolve the problem.

Guess what? I wouldn't dream of letting to a tenant without a policy in place (and yes, I do have to buy them at a commercial rate the same as everyone else).

My personal opinion is that landlords with a sufficiently large portfolio to properly spread the risk can probably make a sensible business decision to do without a rent guarantee. So too can anyone with sufficiently deep pockets to absorb a hit of several thousand pounds should the worst happen.

Anyone else who decides to let without a rent guarantee just so they can save perhaps a tenner a month is bonkers.

Reply to the comment left by "Mark Alexander" at "25/06/2013 - 16:56":

Hi Mark,

Quote "OK, with the benefit of hindsight this is the one deal I should have purchased RGI for. "

- Would you have had to re-apply for RGI when the circumstances changed, and if so, do you think it would have been declined since there was only one tenant left ?
I guess you could have got a guarantor.

- Does RGI have to be renewed, annually for instance, and do you have to declare any changes in their circumstances, in case they want to decline you insurance, just when you might need it most ?

(not that I'm cynical or anything !!)