Apart from actually finding a tenant and agreeing the rent, the one headache about which many landlords are concerned is, “will the rent be paid – on time?” Many landlords have stretched themselves in order to purchase a buy-to-let investment and even one month’s rent in arrears can put strain on the finances as mortgage payments, insurance etc. still have to be paid.
According to research by LSL, up to 7% of all rent is not paid on time, with 1.6% of tenants being in arrears of at least two months (these figures were pre Covid-19).
This seems so unnecessary when there are certain procedures that a good managing agent should have in place to ensure that a tenant always pays on time, not least the following:
1) Extensive referencing at the outset including previous landlords’ references and formal credit check.
2) Qualifying tenants by securing clarification of income and expenditure.
3) On site property managers who know their clients
4) Where a property is has more than one tenant, ensuring that every tenant is jointly and severally liable for payment of the rent. People don’t like to let their friends down!
5) Ongoing friendly communication with the tenants. A tenant is far less likely to default when they are on good terms with their landlord or managing agent.
6) Nipping issues in the bud as soon as they occur. In our book, even one day late would be cause for concern!
7) Ensuring that the property remains well maintained and that issues are addressed promptly. Happy tenants are the best payers.
8) Early, effective and continuous communication with all parties
It is the combination of all of the above that has been a fundamental part of our success in keeping arrears to a minimum.