Evicting an unscrupulous tenant could potentially cost landlords thousands, even hundreds of thousands of pounds, new research shows.
Benham and Reeves has looked at the detrimental financial impact a rogue tenant can have on a landlord's buy-to-let investment based on lost rent, the cost of refitting a kitchen and bathroom, redecorating and replacing the windows, the potential legal fees, as well as the additional cost of mortgage payments out of their own pocket while no rent is coming in.
The independent letting and sales agent says that it takes about nine months in total to evict a rogue tenant from the moment they enter the property to legally removing them. On average across the UK, that is £6,111 of rent down the drain.
However, it goes far beyond the rental costs and the vast majority of the time the property requires a complete renovation as rogue tenants often make off with everything they can or leave what they cannot take in a state of no repair.
Research shows that the two rooms that almost always see the most damage are the bathroom and kitchen and when you add the average cost of a new kitchen (£8,000), the average cost of refitting a bathroom (£4,875), the cost of redecorating (£2,900), new windows (£7,000), as well as the average legal fees of £3,000 required during the eviction process, you are already looking at an enormous bill.
Couple this with the nine months of mortgage payments that you have to make out of your own pocket due to no rental income (£8,412) and the total bill comes to an eye-watering £40,298 – that is 18% off your properties value wiped off in one hit.
However, in London where property costs are much higher, this total cost climbs to £58,091 for the average landlord in the capital - 13% of the average property value.
Kensington and Chelsea in prime central London is the most expensive area in the UK to rent or buy and having to deal with a rogue tenant for nine months will set you back £100,512, 8% of the average property value.
In Westminster, also in prime London, the cost hits £86,885 with Camden, the City of London, Hammersmith and Fulham, Richmond, Islington, Hackney, Wandsworth, and Haringey all seeing the cost exceed £60,000.
The lower cost of property in Barking and Dagenham means that while the bill is the lowest at £47,394, it accounts for the highest amount of property value wiped off at 16%.
Outside of London, landlords in Oxford and Cambridge are also facing a cost of more than £50,000 to evict a rogue tenant, a loss in property values of 13% and 12% respectively.
In Edinburgh, Bournemouth, Portsmouth, Southampton, Cardiff and Manchester, landlords are still facing a bill upward of £40,000, with landlords in every other major city looking at a minimum cost of £35,000 or more.
Landlords in Glasgow, Belfast, and Derry would see the largest percentage of property value lost at 29% of the average property price.
Marc von Grundherr, director of Benham and Reeves, said: “Rogue tenants are a landlord’s absolute worst nightmare and apart from the stress and time consumed dealing with them, the financial impact can be crippling.
“We’re not talking about a bad apple that doesn’t pay rent for the last two months of a tenancy and leaves a dirty protest on their way out. We’re talking about serious criminal organisations that know the letter of the law and every trick in the book to prevent you from getting rid of them, including how to stall the court date for weeks on end and how to deter the bailiff through threats of violence when they finally do call.
“At the very least, you’ll have a dangerously overcrowded sub-let on your hands but more often than not it will be a brothel, workhouse or drug farm. We’re not kidding when we talk about the complete renovation and refurbishment of the property afterwards either, as they will take every single thing they can and destroy whatever is left.
“Kitchens, bathrooms, and windows are often the main features targeted as they know that these are the most costly areas of a property to replace and more often than not they will smash appliances to pieces, disconnect pipping and shatter windows for no other reason than to cause the maximum amount of damage they can.
“It’s an extremely deep-rooted issue that goes beyond the tenant, even as far as the bribery of the concierge and so you really are fighting from day one to get them out.
“That’s why we can’t stress enough how vital it is to rent via an agent who conducts the proper checks through a qualified third party who is trained to spot even the most convincing of forged documents. Failing to do so can cost you thousands, even hundreds of thousands to put right.”