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  • LHA/Universal Credit

    Benefits tenants: tips and tricks?

    Afternoon PT!

    Recently completed on my second BTL.

    The initial interest has been from tenants on benefits.

    I’ve been on the forum for a little while now so I’ve seen pointers from both sides. Could you beautiful members please fire in your tips and tricks for benefit letting?

    Kind regards.
    SBS
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    Omega Property (Formerly SBS Ltd.)

    I am not professionally trained to give advice, generally posting for the benefit of the community or my own personal development.

    Tip 1....dont do it the tenants will most prob be fine its the bloody council that don't want them to move on

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    Tip 2   The tenants could be ok, or they could be a bloody nightmare with enough baggage for an army of social workers.... the Council will definitely, 100% be a nightmare.

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    The practice you refer to is called "gatekeeping", and it is to avoid having to find accommodation for the tenant, because the council does not have enough council houses!! It only happens if/when the landlord serves the tenant notice to quit. So the Council tell the tenant to delay leaving until the last minute, which is not good for the tenant or their family, and is stressful for everyone. It saves them cost of rehousing in temporary accommodation.
    Not every council does this. 

    Conversely, the tenant can walk away from the property with little notice to you if they find themselves in a fortunate position of finding a council house. The first you know about it is when the HB does not get paid. Some councils make provision for double payment for the crossover period, payment for old place and new place, so the outgoing landlord gets the rent paid.

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    The profit of knowledge is in its application
    TumiHawkins.com
    I have just endured the stress and hassle and wasted money caused by the council.

    So I second this
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    1.If in receipt of Housing Benefit then get it paid direct

    2.If in receipt of Universal Credit get housing element paid direct

    3. Get up to date on Housing Benefit and Universal Credit legislation ASAP

    If you have no interest in learning the legislation inside out don't take on tenants who are in receipt of benefits and stick to those who are working or find an agent with a proven track record of managing tenants on benefits

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    How do you get the rent from HB or UC paid directly?  I thought i was now paid to the tenants?

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    If you have to take them, be aware you will spend more time managing that tenancy. Take the advice given by High Yield Property.

    Having said that, I have had some excellent tenants who were on benefits, kept the house well and paid their rent on time everytime. Conversely, I've had a handful that were nightmares.

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    The profit of knowledge is in its application
    TumiHawkins.com

    Clear your mind of media stereotypes and look at the person first

    HB / UC is hassle as its extra paperwork and you have to deal with council/dwp

    But its a form of guaranteed rent from the govenment

    So there is an extra layer of work - Treat it like overtime -

    You need to be paid double time for the extra effort you are going to be putting in

    I do HB/ UC  when  the extra financial rewards outweigh the extra hassle

    So I get 650 HB where as privately I may only get 550

    I get 750 HB whereas privately I may only get 650

    Because HB tenants (where I am ) exceed supply of properties available to them you can barter further

    So a bare uninviting property can be brought to life by them by a redec at their labour expense

    That might save you £500 - £1500

    I`ve had bathrooms. kitchens , fencing etc put in for free by HB tenants who know trades

    Look at the person, then look at the financial advantage, then look at the hassle factor

    If the first two factors easily outscore the 3rd factor then give it a go

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    Jonathan Clarke. http://www.buytoletmk.com


    You always write top posts JC but I am struggling with your numbers, In the part of the country that I live LHA is about £100 - £150 pcm below market rent. A half decent 2 bed semi is priced at !70k and rents out £650 - £700 pcm LHA is around £540.

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    Thank you kindly

    Yes in many areas LHA is now well below market rents so its indeed a non starter

    In my area too  certain types of property really struggle to match private

    But some exceed . Say a 4 bed on a low grade council estate we get 1058 LHA

    Privately a poor condition 4 bed one may struggle to get 900 so 150 pounds to the good for LHA

    But a decent 2 bed in a posh area I`ve got is renting at 900 whereas LHA is only 696

    So working tenants with that one every time

    But additionally as you know the rate goes with a person not the property

    so I can get a 2 bed rate for a 1 bed property with mum and baby and those can work well

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    Jonathan Clarke. http://www.buytoletmk.com