28 Apr

Landlords 'should not panic' if tenants can't pay rent

Landlords 'should not panic' if tenants can't pay rent

Investors in residential property should not panic if their tenant gets into financial difficulties - such as unemployment - during the recession, it has been advised.

The Young Group of property portfolio managers has said that legal action is a last resort, with one of the first steps that can be taken being to see if the tenant is eligible for Local Housing Allowance.

Another option is to let the resident break their tenancy agreement and leave early if they can be easily replaced, as any losses this incurs could be counterbalanced by the lack of hassle and the reliability of cashflow that bringing in a new tenant could provide.

The body suggested actions landlords can take before any problems arise include establishing a good relationship with tenants to know quickly about changes to employment and taking out insurance against non-payment.

Recent figures from smartlandlord.co.uk revealed that the number of unemployed tenants has more than doubled in the past year from 3.1 per cent of the total to 7.8 per cent.
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