Concern Over Rent Arrears
There is no doubt that, for many, making the decision to enter the investment property marketplace for the first time is a big step to take. You will be involved in carrying out some number crunching to establish if it is going to be financially viable but those profit projections can be affected by a number of things.
For instance, a big concern amongst some landlords is if they take on a tenant that proves to be somewhat uncaring when it coms to looking after the property whilst they are living in it. Yes, you will no doubt have landlord insurance but if a tenant trashes the place and destroys many of the fixtures and fittings and steals some of the furnishings it could eat into your profit.
Recent research by the National Landlords Association (NLA) has revealed that 32%, almost a third, of landlords here in the UK have had tenants that have gone into arrears with their rent in the last year. That is around half a million tenants – a sizeable number. On average these landlords are faced with trying to retrieve rent arrears of £1,649 from each tenant. – that is over £800 million. Another interesting statistic is that 22% of landlords are concerned that tenants will not be able to maintain their rent in the forthcoming 12 months.
Going forward, it really is important that landlords or the letting agents looking after their portfolios have a system in place to closely monitor rent arrears and deal with such situations as quickly as possible. Yes, there are going to be instances when some tenants are going to be unable to pay a month’s rent through no fault of their own – perhaps due to loosing their job. However, if there are systems in place to deal with this situation immediately so much the better from the landlord’s point of view. If not, your profit margin could be eroded.