Tag: Rant

How do we know a tenant will pay rent? – Property Rant 021

Hey, guys.

Property Search.

ThinkGladfish.

I'm Brett Alegre-Wood and this is Property Rant.

So, how do we knowthat a tenant's going to pay the rent? And this is actually probably forbeginner investors because once you've had a few properties and you've had themfor a period of time and you've got.

everything's settled down, you realizethat actually it's very rare that things do go wrong.

And when theydo, if you've got a good agent, you address them, it's not an issue.

So,how do we know they're not going to pay the rent? The reality is we don't.

Wedon't control them, we don't control their lives, we don't control theircircumstances.

The best we can do is provide a property that has good, solidfundamentals.

Shops, schools, transport links, major employers and majorinvestments, you know, that's attractive to the tenant, that's well up kept, thatany problems are sorted out, and if we actually sort that out and we dealwith that stuff, then we're more likely to put ourselves in thebest position possible.

But that doesn't mean thatthey're not going to lose their job, they're not going toget pregnant, fall in love, break up, you know, like all the normallife things that happen that can cause financial strain.

So yes, we can dotenant referencing and we can do all that sort of stuff, but at the end of the day,you cannot control another person.

And you can do the best you possiblycan by getting a.

You know, the real key is getting a really good managingagent because the reality is in my experience of over 20 years is, whensomething's going wrong, it's often not just an isolated incident.

If theydon't pay their rent on time, you know, once, you might let them getaway with.

Second time, you know what? You better be ready to move them outbecause the reality is very rarely do they come back and they pay up and do all thatsort of stuff.

What you'll tend to find is lots of excuses and things like that.

And you can say, "Well, hold on.

But mine's an expensive property in agreat area and all that sort of stuff.

" Things still go wrong for people that livein those houses.

You know, we have just as many things go for expensive propertiesas we do for cheap properties.

Sure, cheap properties, you know, you canget into the housing association and things like that and they present theirown issues.

But if we're talking about vanilla lettings deals, if you like,which are normal mom and dads, families, that sort of stuff, stuffhappens.

You can only put yourself in the best position.

You cannot control theother person.

The important bit is when something does happen like they paythe rent late or they, you know, short pay it or whatever it is, that youhave a managing agent that gets on top of them, gets on top of it quickly and reallymanages that well.

And that is often the determination between having a real painin the arse, excuse the French, or just having a seamless, effortlessthing where yes, you may have to eject them, but you've got everything sorted,you've got everything in order and it just happens and it's in process.

And yeah, youmay have to try and collect some money off of them and you may lose somemoney, that does happen.

So, you can't control them, you know,but you've got to get over that and the reality is we're talking less than3% of the entire lettings.

And we've got over 1,250 properties thathave problems.

And that's any sort of problems from late payments through toactually delinquents through to major damage and things like that.

It's lessthan 3% of the time of the properties.

And obviously, some properties in morelower areas, yeah, that's when you have a lot more problems in those areas whenyou're dealing with a really low.

Low tenants, that's not right.

The low rentalfigures and low property prices because oftentimes, the spec of the propertyisn't as good and things like that.

So, it's not that the people areworse, it's oftentimes that the properties aren't up to the same spec, you know? Butalso, it can be that people down there struggle with money a lot more andthey're living on a more, you know, less than the margin.

Okay, guys,have a great day.

Live with passion.

Source: Youtube