Financial Pressures for Landlords

March 1, 2010 - PRLog -- Financial Pressures for Landlords

The current economic crisis is having an adverse impact on both landlords and tenants. Rising levels of unemployment and the increasing number of people facing redundancy means that many tenants are having difficulty in paying their rent.

The knock on effect is that landlords may then struggle to pay the mortgage. A tenant in arrears could lead to potential repossession of a landlord's buy-to-let property which in turn could mean possible tenant eviction. Three-quarters of landlords have reported being affected by tenants who are unable to pay their rent.

What can you do to minimise the risk?

Before the tenancy begins

•   Take up a reference from a potential tenant's employer.
•   Perform a credit check on the would-be tenant.
•   Take out appropriate Landlord Insurance cover:
o   Rent guarantee insurance (loss of rent cover).
o   Legal expenses insurance.

During the tenancy

•   Be alert to early warning signs such as late payment of rent, a request for a rental holiday or a request to change the rental terms.
•   Be aware of a tenant's silence as this may indicate a problem.
•   Keep channels of communication open and consider negotiating if your tenant is facing financial problems.

What can you do if faced with financial difficulties?

•   Contact your mortgage provider before you default and request a payment break or seek to renegotiate the payment terms.
•   Obtain independent financial and legal advice.
•   Consider seeking debt counselling:
o   National Debtline: www.nationaldebtline.co.uk
o   Consumer Credit Counselling Service: www.cccs.co.uk
o   Citizens Advice: www.citizensadvice.org.uk

Financial security is essential for landlords so ensure that you take steps to minimise your exposure to, and the impact of, defaulting tenants and vacant properties. Additionally, arm yourself with information as to what you can do if you find yourself in financial difficulty.


Find out more about landlord insurance from Direct Line for Business.  View original article Financial Pressures for Landlords