The idiom or the figure of speech “look for a needle in a haystack” is used to describe something elusive in a large space or a sisyphean task. Magnifying glass on the needle is isolated on white

How to keep a good tenant.

What Makes a Good Tenant?

Good question!

I suppose we all have definitions of a good tenant, in our earlier blog, we called a good tenant a suitable tenant.

They are, for us, one and the same thing.

The word GOOD is too subjective to classify in this instance. We look at a suitable tenant in the same way that we look at a good tenant.

A good/suitable tenant is simply one that pays their rent on time and looks after the property.

We could take this further and hope that the tenant is communicative and willing to do smaller repairs off his or her own back, they keep the property immaculate and even improve its condition by means of decorating etc.

For the purpose of this blog, however, a suitable V good V dream tenant is somewhat irrelevant, in essence, all we can ask of a tenant, and the tenant that at a minimum we all want to keep, is that they pay their rent on time and look after the property, anything else here is a bonus!

Ask Yourself One Fundamental Question

There is no dark art or hidden secret to keeping hold of that ‘suitable’ tenant

Just ask yourself this one question – ‘why would this tenant want to move?’

You will generally find the answer yourself

  • You’re raising rent continually and excessively
  • You are shirking your maintenance responsibilities
  • You are visiting the property too often
  • You will not reinvest in the property during a tenancy
  • You are not allowing them basic privileges upon request

Why do we NEED to Keep Hold of this Suitable Tenant?

In short, and by no means of beating around the bush, the tenant is your profit, they are the cogs of the industry, without tenants we have no business, no profit and a whole heap of liability.

This means that keeping (almost) any tenant has its benefits providing you are receiving your rent, but keeping a suitable/good tenant is increasingly important.

For one, anytime a tenant moves out of your property you are left with some form of expenditure, whether that is merely the council tax liability and subsequent mortgage payments, or it is the cleaning, disposal of goods, repairs and redecoration, it is all expenditure coupled with lost profit.

Generally, the longer the tenant is at your property, the more this will cost you when they move in terms of redecoration and repairs. The smaller repairs that they felt they could live with won’t be tolerated when the new tenant moves in so they will need to be dealt with as well.

Secondly, we have the added factor of hassle. When a tenant moves out we not only have to check them out of the property, we need to inspect against our inventory, deal with any repairs or damage that the tenant has either caused or unreported, we need to deal with the deposit, whether that is claiming against it or simply returning it. If we are claiming against it, we may need to request a statutory declaration if the tenant does not reply to the claim or we may need to use the dispute resolution service if they contest it, all this is a laborious and time-consuming task (see our DPS blog)

If only it was that simple! We also need to transfer the liability of the utilities into our name, there may be debt on the gas and electric meter, meaning that we either have to clear the debt or call the electric company, go through a drawn-out process to have the electric meter reset by means of going to collect a new key from the local shop, using a ‘reset’ code then returning to the property to clear the debt, only then can we return to the shop to add some credit to the key and get our supply back on.

If only the gas was that simple, in most cases the energy company will want to send an engineer out to the property to reset the meter, great huh? NO, this means we have to wait a few days, we also have to return to the property and hang around for the engineer to attend his 4-hour window, in the cold I might add!

We have to transfer the water into our name, notify the council that we are now liable for the council tax, make the decision to hold off payment until we either find our next tenant or we receive our arrears invoice. If we make the payment immediately, in some cases we would then receive the overpayment back in the form of a cheque after finding the new tenant, meaning we now have to go to our bank to pay this in.

OH! Lastly, we have the task of retaking pictures and starting the entire process of listing, advertising, speaking with prospective tenants, viewings, applications, tenant referencing and signing up that suitable tenant all over again! furthermore we can never be sure that they will be as good as the tenant we have just let slip through our fingers.

SO…..How do you Keep a Suitable or Good Tenant

Sorry that the above paragraph was a little drawn out, we need you to appreciate that loosing (almost) any tenant is bad news for an investor/landlord

Returning to my earlier question ‘why would this tenant want to move out’ we have the following:

sometimes matters are beyond your control, and despite your best efforts a tenant may still move on. However, we need to do whatever is within our control to keep this suitable tenant

We need to be a GOOD landlord

  • When a tenant reports a problem, we need to act and act as soon as is reasonably practicable
  • We need to address the more significant issues like a broken boiler with our tenant in mind, especially longer-term tenants
  • We need to show the tenant respect and allow them to LIVE in THEIR home comfortably and allowing them space without constant intrusion
  • When a tenant requests a change or seeks a pet, common sense needs to prevail
  • We need to avoid becoming complacent, the longer the tenant is at the property the more value you should attach to them

This list really could go on, but I am sure you get the picture by now.

Having balance and of course with revenue in mind, you need to do everything within your power to eliminate the controllable reasons why a tenant would want to leave your property.

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Making Tax Digital

OK, so you have just sailed through GDPR, used the new stamp duty and tax regime for property income to out manoeuvre your competition; what is the government planning next?  Well, one thing is Making Tax Digital (MTD) also referred to as Real Time Information (RTI) in some press sources.

What is the difference between MTD and RTI?

Well for the purposes of this article nothing really.  Making Tax Digital (MTD) is the name given to the specific government project whereas RTI is a generic term for any recording of information in a digital format thereby making it more accessible and ‘real time’.  It is just the case that MTD will turn accounting information into real-time information (RTI). 

So what is Making Tax Digital (MTD)?

Making tax digital is the government’s scheme to move all our tax accounting onto digital platforms. It was due to be introduced for businesses and landlords in April 2018 but as is so often the case with government IT projects it has been delayed.   

The Government statement on July 13, 2017 read; ‘the changes mean that the smallest businesses and landlords will be able to move to keeping digital records for tax at a pace that is right for them.

Lots of references to businesses, my portfolio isn’t structured as a business?

Maybe not but the legislation is now more often than not lumping the property investor in with any changes affecting businesses.  This appears to certainly be true with MTD.

Then what do I need to do now?

Keep your eyes peeled and remain vigilant, This one is coming. The new timeline is businesses will need to move onto the digital accounting platform in April 2019 to meet VAT obligations.  If you are a non-VAT business the government have stated that you won’t need to move onto the digital platform before 2020. We will of-course keep you fully updated and posted along the way so watch out for our next article on this.