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Welcome to the second of three interviews with Elaine Power, known as Dislexic Landlord on Property Tribes, one of our most prolific and popular contributors.DL has been a landlord in the Newcastle area since 1982 and has been through several property cycles. She has a wealth of knowledge and experience and is very generous in sharing that. She is also very active in the landlord community off-line and attends many meetings in her area.We have recorded three interviews with DL, one on the state of the private rented sector, one about her property journey and some of the lessons she has learned along the way, and this one, her tried and tested "recipe" for selecting and referencing tenants:
What titbits did you take away from this interview with DL that you can apply to your own property business?SEE ALSO - The ultimate way to vet a tenant?UP NEXT - 15 questions every landlord should ask prospective tenantsDON'T MISS - Dislexic Landlord's greatest hits and tipsNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
when I am dealing with my core business I am doing it Local and I would say 99% of my customers are from the area
so I have not had to deal with distance Guarantors yet
But it may well happen and I think I would go along with it as long as I had a phone conversion and been very proactive on identity ect
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Thanks DL. Interesting thought about a phone conversation, hadn't thought of that but it makes a lot of sense. I always check the Land Registry to see if the guarantor owns where they say they do - that's caught a few out before now. Do you do that? If not I ask for a scan of NI card and recent bank + utility statement. That's caught a few out as well!
I always feel: hassle before = hassle during + hassle after the tenancy. I always like to cut it off now at hassle before!
Up till now I have never had to take a Guarantor to court
My own feeling is 99% of tenants don't want to let the Guarantor down but they have come up trumps when a Tenant did a flit or the Tenant stops paying there rent ...
Another great interview - one point that I would disagree on would be the letting failed applicants down gently / telling them property has gone when in fact it's still available.
I just tell them that I don't think they're suitable tenants for me (without being more explicit) - gives them a chance to work on themselves for the next application they make.
DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.
You got top billing now DL ! Nice one
But I want to pick up on you taking no deposits
500 is 500 at the end of the day .
Plus a guarantor as well but no need to be an either/ or surely
You have say 100 units thats 50K security you actively choose not to take
Want to get to the root of why you dont
You dismiss it too lightly in the interview I sense saying - well what does it buy - only a new bath
Well yes but a bath is a cost and 50K will buy a lot of baths
My gut says you don`t want deposits just because of the extra hassle of the paperwork.
Not taking a deposit though is potentially kissing goodbye to 500 for no good reason
Sometimes i let 500 go yes on other stuff but only because i can write off that debt without feeling it
If it happens 3 times a year then thats ok . If it happens every week thats not ok
So i reckon you take a punt and weigh up the `paperwork hassle` v `lose out on the odd occasion`
It may be an acceptable business risk but a potential 500 for 30 mins work is a good rate of pay think
In short ( tempt tempt ) - You are making too much money DL is the real reason
Jonathan Clarke. http://www.buytoletmk.com
Really great interview DL (and Vanessa of course). I think for the first time ever on PT I would actually side with DL over JC! I personally wouldn’t go down this approach in the south as a deposit for me is around £1000-£1500 but I do see where you are coming from. Jonathan what I understood from the interview (correct me if wrong DL) is that she doesn’t lose the £500 as that £500 is covered by the guarantor. The difference is there is no monetary value with the guarantor, it can be £100 or £1000+E.g. taking that example of the bathtub, my understanding is she has more chance getting the guarantor to cover the cost of a bathtub and much more (let’s say the whole bathroom was damaged) than she would if she went through a deposit scheme and the hassle of having to prove the condition prior and for them to agree. I do have a question for DL though - Have you ever had a situation where there were damages at the end of the property and the guarantor has refused to pay?
On a personal note can I first say that I am devastated you have sided with DL . It had to happen one day I guess but it still was a shock when it actually happened and it has cut me deep. So much so I may have to take a couple of days off to recover. But let bygones be bygones. No hard feelings.
I only listened to the clip once so i may have misunderstood . But running with your interpretation wouldn't you still rather have the first 500 safely in your bank account rather than the guarantors. Then yes by all means if the damage is greater than 500 cover that in the T&C`s of the doc that the guarantor signs. That`s a good idea. If the tenant defaults though and there is doubt over the claim then the guarantor may follow suit . Family tend to side and support each other in times of adversity . I need a better reason personally as to why one wouldn't want the first 500 safely in the LL`s account at the start
The hassle to prove the condition (if disputed ) would be virtually the same surely whether its a deposit scheme or the guarantor
Don't worry Jonathan, I probably haven't even put a dent in your vast fanbase, plus with the amount of wisdom you spread i'm sure i'll back soon!
Yeh for me personally I don't think I'm bold enough to not take a deposit and I DO agree with you when you say why not do both. With that said, I can see why DL doesn't and whilst I would have scoffed at this idea in the past, the way she conveyed herself made me more susceptible of the idea.