What you need to know about letting a property in Bristol
Here I cover some common pitfalls and issues private Bristol landlords face when renting out their property, from not legally protecting tenancy deposits to not properly checking out tenants’ backgrounds. And it all started with a chance conversation…
The other day I was in coffee shop, whilst waiting for my coffee to take away, I began making conversation with a gentleman in the queue. We covered the usual comments about the weather, what I do for a living, and just general chit chat. As we began talking, he started to mention that he had bought a property at the end of last year. Like most landlords, he had purchased this property for his pension in the future, of course: “Property is safe bet right?”. But is it?
The initial lettings excitement and dreams of making money from property
Like most proud owners when getting the keys to your first property investment you are overwhelmed with emotions of excitement, frustration and anxiety all rolled into one, but overall it’s a positive experience.
Once he had purchased the property he carried out a full top to bottom renovation including brand a new kitchen and bathroom and new carpets throughout.
When he finished all the work he decided to seek wisdom from the Internet and managed to ensure he had his gas and electric safety checks and certificates in place.
Rather than going through an agent he decided to advertise his property on an advertising portal for private landlords. He was extremely impressed with the amount of leads he received from his advert.
Whilst looking through his inbox he noticed that the amount of interest he had for that single property, he couldn’t help but think, "if only I had some more properties I could probably make a good living?".
When you think you’ve found the perfect tenants…
Now the leads were flowing in, and he began to arrange viewings for the property. He went on to explain that he was approached by a couple who seemed like ideal tenants, they had not long relocated from out of town and had both just started working for a large company.
What had made them more appealing than the other potential tenants, was that they had offered to pay him rent 3 months in advance and a deposit.
For him things looked like they could not really get any better, he went home to his family delighted with the news of these new dream tenants.
How a lettings dream can quickly turn into a lettings nightmare for landlords
He went on and described how almost overnight this great feeling of getting on the Buy-to-Let investment ladder dream had turned into a nightmare. The first three months flew by, not really hearing anything from the tenants. It wasn’t until the rent was due in the fourth month when things started to take a turn for the worst.
Four days after the rent was due he decided to contact the tenants on their mobile phone; he was unable to speak to them so he left a voicemail for them to contact him as soon as possible. The following evening he still hadn’t heard from them so he took it upon himself to visit the property.
One of the occupants opened the door and let the landlord into the property. The landlord then asked politely, "I’d noticed that the rent has not been paid this month, is there any reason for this?".
The couple went on to explain how they did not pass their probationary period at work and had both lost their jobs. At this point the landlord really did not know what to do or say, both tenants said they were actively looking for new jobs and that if he just bears with them they would be able to have the rent paid and up to date in no time.
The landlord was gutted, he just spent most of his funds financing the new property with refurbishments, which now means he will have to sacrifice part of his salary towards paying the mortgage repayments on this property. The landlord explained to his wife what was going on, they were hopeful the tenants would find a job but of course was a little concerned over the family income.
Have you protected your tenants’ deposit?
Three weeks had passed by when he received a text from the tenants saying that they have been struggling to find employment and have been seeking advice from friends, relatives, and of course, the Internet.
Rather than giving any further comment on the rental arrears, they asked him if he had protected the deposit which they paid to him at the beginning of the tenancy. The landlord didn’t know what they were talking about and asked them "what do you mean?” He had no idea.
Legal repercussions of not protecting a tenancy deposit
Things started to go from bad to worse. The tenants had informed him that he was in tenancy breech for not protecting the deposit and that they would be seeking legal advice to sue him for not carrying out his legal obligations. Again the tenants refused to discuss the rent arrears and constantly threatened him with legal action.
Keeping this story condensed, in result of this, the landlord ended up paying the tenants 3 times the original value of the deposit and also had to take legal action to begin the process of evicting them; it wasn’t until around 7-8 months that he was able to regain possession of his property.
I could see from his face and tell from his voice that this had left him in a very stressful situation which took its effect not only financially, but also personally on his family life as result.
He carried on and explained how he and his wife had to cancel this year’s summer family holiday as a result of all of this, saying sadly "This was not the plan. Our lives were meant to get better from this investment, and not the opposite".
I was really touched listening to his story, so much so that I just felt like I needed to write this article to educate anyone who is considering getting into the Bristol Buy-to-Let property scene. I would advise them to try and educate themselves beforehand so that hopefully they do not get into similar issues.
Landlord advice from expert Bristol letting agent
My views as an expert letting agent on how to protect yourself from situations like these when letting your property out in Bristol:
The landlord could have contacted the employers to confirm the start date of the tenants’ employment. Had he asked the question he would have been able to establish that the tenants were going to be on probation. We would always request a guarantor for applicants in this situation. His other option could have been to ask the tenants to pay the whole six months rental in advance
Always clarify tenants’ employment status, including probationary periods
Protecting a deposit is a legal requirement
The biggest pitfall the landlord suffered was the fact he was not aware of the legislations around deposits. ALL deposits that are taken must be protected. Can you imagine having to pay 3x the deposit value? In essence the advance rent he did receive had to be paid back to the tenants. Not protecting the deposits seems to be quite a common problem that we come across often.
If the landlord wanted to avoid letting agents fees, then I would have at least spoken to a few of local agents in the area. I’m sure they would have been able to provide him with the basic knowledge on how to avoid this.
I personally recommend that all new Buy-to-Let landlords to remember that you are entering into a business. With every business you must do your due diligence and have knowledge of the service or product you are getting involved with.
Approach Buy-to-Let like a business
Educate yourself on the lettings industry
In today’s times we are blessed with a lot of organizations such as NLA (National Landlords Association) and even local councils who set up events to educate landlords with current legislations and even changes which are forthcoming. A good agent will always run through their practices and make sure you are aware of your legal obligations.
I hope you found this blog useful.
If you are a landlord looking to rent your property, or even looking to enter the Buy-to-Let market, do feel free to contact us for a FREE no obligation consultation. Call us on 0117 966 4376 or email us at firstname.lastname@example.org.