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Wednesday, February 20, 2013

Young Tenants Gamble

I've just had notice from one young tenant.  Chris I guess is about 26 and he's moving in with his girlfriend.  This is one of the issues of letting to 20 something tenants.  They often rent for a short period of time before moving on.  In the past this was probably to buy a property with their partner.  Now it's more likely to be to rent a larger property with their partner if they started by renting a one bed property.

Property re-let very quickly

The good news for me is that my letting agent Express Lettings was good to their name and was straight on the case and has re-let (subject to references) to two new tenants.  If I was worried about letting to Chris being a little on the young side.  The two new tenants are much younger.  One is 20 the other 18.  So is this a good idea?

Now I've let to young couples before.  It's a high risk strategy in that young relationships don't always last.  This isn't good for the longevity of your tenancy.  The plus side is that if things work out then at this young age they probably won't be moving on for a number of years.

Guarantor is a must

I would never have even considered letting to a couple so young without the comfort of a tenant guarantor.  A good sign was that one of the accompanying parents volunteered to act as a guarantor without being asked.  Subject to both parties passing the referencing test I hope to have this property let by the middle of March.  This new tenancy will make three of my tenancies that have been subject to a tenant guarantor.  In the current uncertain economic environment with young tenants being particularly vulnerable.  Having a tenant guarantor is a valuable weapon in a landlords arsenal.  I urge landlords to use it.

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Anonymous said...

Would you still also look for a deposit if you have a tenant guarantor signed up? I felt a bit vunerable with a young couple and insisted on a deposit as well, so that they had something to lose if they turned out to be a problem! This proved to be a barrier for them to raise, so I didn't let the house to them in the end.

Cybermouse said...

We have had young tenants in the past and find that the problems/successes work out around fifty percent. The only problem with that is that a subsequent re-let takes time and loses money. There is also the almost-certainty of people between 18-25 falling back onto Housing Benefit at some point. We all know that this means a rent reassessment that we neither want nor ask for. Guarantors are good but still need chasing in our experience. Again, this is time, effort and money. When we get a young person applying for one of our smaller flats we always gulp a little, caught as we are between giving youth a deserved chance or giving ourselves potentially more hassle than we require. In the last instance, last week, even with a parent guarantor, we decided against letting to a thoroughly nice 22 year-old. He was already on Housing Benefit as it transpired, with a Bursary from a local college. The Bursary is only as good as his willingness to remain on the course so we took the view that to wait for the right tenant (?) is a better option.

The Editor said...

Thanks for the comments Cybermouse. I'm waiting for the references to come back for the tenant and guarantor and then I'll see where we go from there!