Rent increase for v longstanding hermit tenant?

Maybe have a chat with the tenant and explain your situation. I guess if he’s living in a 2 bed flat he’s working? You may be able to come to some sort of agreement somewhere in between what he’s paying and what it’s rental value is worth now. I think I’d rather do this and he stays rather than having to pay out 40k to gain a couple of hundred pounds a month. Also, if he’s been there 20 years and always paid the rent it would be a shame to lose him. As long as he’s not causing any damage to the fabric of the property, it’s his choice to live as he does! Good luck!

I have had a similar situation and if I were you I think I would try to get a small increase from him but if he resisted I would carry on with the £1300 pcm. My logic is why spend £40k. If he stays he will wreck it again, if he goes your have to spend £40k. Plus you have the costs of getting him out and he will probably stop paying the rent for the year it takes. Hope this helps. Jeff

Reply to the comment left by Jeff Niehorster at 01/11/2022 - 10:31
I am usually on the capitalist side of things but a long standing good (arguably messy) tenant is worth their weight in gold. why would you want to lose him and possibly turf him out of his home (after 20 years this would certainly be classed as a home) possibly unaffordable elsewhere. Moreover, using your figures it would take 4.76 years to get your 40K refurb investment back! i would do the decent thing and leave the poor sod in place. and having paid you for so many years i would also pay for a one off deep clean. It will cost you, what maybe £1500 and might help this poor guy kickstart a better 'mental framework' moving forward, or let him be if he is happy how he is!

karma is a great leveller. unless you want to sell up let sleeping dogs lie i say!

Increase the rent to the LHA figure for the size of the property in that area, using a s13 Notice. If the tenant is employed then this will be a very affordable rent, and if he is unemployed then he can claim Housing Benefit or Universal Credit Housing Element to help him to pay the rent.

If he chooses to downsize into a 1 bed property, then he will give Notice and move out, at which point you go in and do the refurbishment and re-let at the full market rent. But essentially it will be the tenant's choice as to whether he chooses to leave or chooses to remain.

Alternatively, if you don't have a mortgage or can afford to accept a low rent, then simply increase his rent in line with inflation each year. Social housing providers use the September CPI rate + 1% as their standard rent increase rate each April, so you could adopt this method. It may not keep up with the market rates, but it may be seen as a fairer method of determining rent increases.

Hmmmm!! Well put question and both sides of the response well argued.
How old is the tenant?
If he's been with you 20 years, chance is you have to do a complete refurb anyway?
acctsol above is right.

I struggling to see how you could spend anywhere near £40k just on a kitchen and bathroom refurb in a two bed flat.
New kitchen say £8k and bathroom £3k. Paint and decorate yourself if possible. Even if you need professional decorators only going to be a couple of grand. New carpets and underlay say £3k. Bit of lino in the kitchen or Karndean if you fancy going upmarket a bit. Surely you wouldn’t be spending any more than £20k ?

Boot him out, then do a £40k refurb, followed by a bad new tenant that trashes the kitchen and clears off leaving rent arrears! Yeah right, I'd risk that!

I've had a similar tenant for 15 years. I expect that one day I'll get the property back in right state. Leave him be I'd say...Imagine if in that 20 year period you'd had tenants in and out, rent arrears, voids, malicious damage, anti-social behaviour, community charge bills etc etc...you may not have been much better off if at all.
Try nudging the rent up a little and when he finally has to go you can refurbish and HOPE you get a tenant as rock-steady as he was. Just my way of thinking.

Better the devil you know imo. Keep him happy and be thankful.

the problem you may run into is whether the property meets the EPC requirements and whether you can get access to improve it.

There is also the cost of EPC improvements and whether the rent covers this.