One area of being a landlord that I have always kept to a minimum is renting to tenants that are on benefits. For me, I don’t want to have to wait to receive my rent money. There are some people who like to deal exclusively with benefits tenants that I know so I have collected some of their top tips together to share with you. This way, if you decide to go down this route, you have a basis to start on and then start your own learning journey in this area.
Take Control Of The Bills
This is one of the things that has always put me off of having benefits tenants. Not being able to control their bills and ending up paying a massive bill when the tenant has vacated without notice. There is a way around this though.
The best way to take control of their bills is to install meters in each of the rooms and then let the tenant arrange their own contract with the energy supplier. This keeps you out of the loop and the tenant fully responsible. I have heard of some landlords selling electricity tokens to their tenants, but ask yourself this. Do you really want to be getting calls at 8pm to go out and sell the tenant electricity? I know that I don’t want to be getting interrupted every evening and I’m sure that’s not one of your goals either. Make the tenant become responsible for their own bills.
Make Sure You Have A Reserve To Live On
One of the other big issues for me is having to wait to get paid your rent by the government which always comes in later than it does with professional tenants. I prefer to get my money upfront and then I can relax knowing that the month is paid for. One of the advantages about dealing with tenants on benefits though, is that you always get paid your rent money.
Because of this 2 to 3 month gap that you may experience in getting paid your rent, it is advisable that you have a reserve of cash to live on until your payment comes in. This will give you a comfortable cushion to live on and takes away the stress that can happen from not being paid for several months. Of course, as you build up your portfolio and have regular money coming in that will make it much easier.
Keep Learning Your Craft
One of the things about new landlords, and also those with some experience, is that they don’t keep themselves up to date with legislation. They don’t always know what to do and when to do it. This can be easily resolved by taking the Landlords course with the RLA.
Keep yourself up to date with all legal news regarding property and landlords as well. You don’t want to find yourself getting caught out by new legislation that has slipped by you.
For instance, if you weren’t aware of the new tax laws that were coming in, then you may find yourself out of pocket when you receive your tax bill. You need to be aware of this stuff before it happens so that you don’t get hit financially. This is your income stream and you have to protect it as an income stream.
So here are a few things you need to think about. If you are really wanting to go down this route, I would suggest you look into the systems that others have put into place to really make this work.