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Ant Lyons · 06-08-2012, 03:29 PM

first of all apologies. Not been on tribes for ages, don't know why just been busy holidaying and working.

Anyway I'm interested to hear what you all think of the following.
I have a nice flat in weston super mare that I refurbed 2 years ago. My last tenant went awol and an agent has had it listed for 8 weeks - NO viewings.

I put an ad in my local paper stating that I would accept tenants who did not have a deposit as long as they had a guarantor in place and rented out the property the following day to a guy in his late twenties who is at college and receipt of LHA. He;d been looking to move out of his current flat as it had problems with "damp and rates - other than that it's ok (sounded awful). he just didn't have the £1050 needed by an agent in the form of 1 months rent up front, £200 reference fee + 1 months deposit.

so do you think I'm mad for renting without a deposit? I personally think the chances of getting it back from dps are minimal anyway and asking for deposit is nice but as a requirement it can pt good people off.

The same agent has a property on with a landlord who insists on 3 months deposit - so far it's been vacant for 4 months.

MARY LATHAM · 06-08-2012, 04:34 PM

I don't think you are mad, the only landlords who are mad are those who have long voids in my opinion.
.
I don't take a deposit because I actually mean to retain money I take it because then I am holding something that my tenant wants back and that makes me feel more comfortable giving them my property which I want back in good condition. Actually I think that taking a guarantee puts them under a similar obligation - they don't want to let the guarantor down.

These days tenants have to find quite a chunk of money to enter their first rented property and it is not surpr
ising that even those on good income can't always find that money

Follow me on Twitter @landlordtweets

Vanessa Warwick · 06-08-2012, 05:02 PM

Part of me says "Needs must Ant" ... you don't want a void property ...

But part of me also feels that the deposit protects you, the tenant, and your property.

If you back that up with a really robust and detailed inventory, then any deposit dispute would not automatically find in favour of the tenant.

You could always suggest paying the deposit in four installments over four months, or something of that nature?

Tenants should have "skin in the game" because it makes them more respectful of the property in my experience.

If they cannot afford the deposit and the month's rent, some might say that it is financially unviable for them to get into the property in the first place.

I believe lettings agents work to a % income of what rent they can actually afford, and this might be a good indicator as to whether your tenant can afford to live in your property.

Mark Trenfield · 06-08-2012, 05:27 PM

Hi Ant
It might be risky renting without a deposit - but it certainly isn't mad - keeping the property empty is madness!

With tenants - we are landlords earning an income.
Without tenants - we are property investors with depreciating assets!

I rent out some of own properties with zero deposit taken and I decide on a case by case basis.

Taking zero deposit means I don't have to protect it!

The downside is that the tenant could vanish overnight and I would not have any of their money to cover any outstanding rent or repair any damage. However, you've taken the time to meet your tenant and you have chosen to trust them as well as help them live in better quality accommodation.

I think the great thing about being a landlord and selecting your own tenants is that you are empowered to change someone else's life by offering to house them - when others would not.

I salute what you have chosen to do - and hope your tenant doesn't let you down.

Good luck

Mark

Vanessa Warwick · 06-08-2012, 06:06 PM

I have just this second come across Deposit Approve via twitter.

From their website: The Deposit Replacement Scheme is a quick, simple and effective alternative to taking deposits at the outset of a tenancy. This allows you to take NO DEPOSIT whilst still providing your landlord with more protection than a Government Deposit Scheme.

How it works

The Tenant pays a small upfront fee for the Deposit Replacement Warranty; this is not a recurring cost but a one of payment for the whole duration of the tenancy whether that is for 6 Months or 10 years

At the end of the tenancy, Deposit Approve settle any valid claims with the landlord within seven working days, we then pursue the tenant for any non-payment of rent, or costs for damages, breakages or losses. Any disputes regarding costs are between Deposit Approve and the Tenant, leaving the landlord free to re-let their property.

Sounds interesting?

Adam Hosker · 06-08-2012, 06:11 PM

We do a lot of our LHA properties with No Deposit or Admin Fee, at the request of a landlord. At first I thought she was mad but I soon learned that LHA was not as bad as people make out.
In rare cases, we don't do rent in advance - not advised though.

Deposit Approve, now that is interesting. They don't seem to be open for business considering "making a claim" has Downloadable Forms which are none existent.. If it was a proper setup, id conciser it.

Vanessa Warwick · 06-08-2012, 06:13 PM

I have tweeted @DepositApprove so that they are aware of this thread and can come and join the conversation.

I think they have just launched and I can empathise with teething problems on websites. Smile

Jonathan Clarke · 06-08-2012, 11:59 PM

I quite often let properties without a deposit. Like Mark I take a view on a case by case basis. With an LHA tenant they will often find it impossible to raise 1 mths rent. Its a calculated risk. Ive never had an 8 week void. 8 days and I`m wincing.

I ask them if they are able to put a little something in of their own funds. Some immediately say yes and refer to the home bond scheme or rent in advance from the council. I get a bit annoyed when they do that as they give the impression that this is somehow their money. I repeat the question stressing the word own funds. Some look blankly at me and you can see that they just havent even contemplated the thought of contributing anything of their own or saving even £5 a week from their benefit money towards a deposit.

Others say - well its been a struggle but we have looked at what we can cut down on as we thought this might happen and we have managed to save £80 over the last few months. I like these people. £80 to them is a very significant sum and it demonstrates they have made personal sacrifices in a desire to get their own home. They have thought ahead and are more likely to be rewarded with a property from me in view of that.

manc · 07-08-2012, 09:12 AM

(06-08-2012 04:34 PM)Mary Latham Wrote: I don't think you are mad, the only landlords who are mad are those who have long voids in my opinion.
.
I don't take a deposit because I actually mean to retain money I take it because then I am holding something that my tenant wants back and that makes me feel more comfortable giving them my property which I want back in good condition. Actually I think that taking a guarantee puts them under a similar obligation - they don't want to let the guarantor down.

These days tenants have to find quite a chunk of money to enter their first rented property and it is not surpr
ising that even those on good income can't always find that money

Follow me on Twitter @landlordtweets

Mary
Re: I don't take a deposit because I actually mean to retain money I take it because then I am holding something that my tenant wants back and that makes me feel more comfortable giving them my property which I want back in good condition.

What money do you take if you do not take a deposit?

If it is two months rent can the Tenant not pay the last two months rent when they give notice leaving the Landlord with nothing at the end of the tenancy?

Regards
Steve

RobertBetts · 07-08-2012, 12:04 PM

(06-08-2012 06:11 PM)Adam Hosker Wrote: We do a lot of our LHA properties with No Deposit or Admin Fee, at the request of a landlord. At first I thought she was mad but I soon learned that LHA was not as bad as people make out.
In rare cases, we don't do rent in advance - not advised though.

Deposit Approve, now that is interesting. They don't seem to be open for business considering "making a claim" has Downloadable Forms which are none existent.. If it was a proper setup, id conciser it.

Thank you for the heads up on the wrong form, we have informed the IT people who will have this rectified as soon as possible Cool

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