COVID-19: How landlords can cope with tenants that can’t pay
16 December 2020 274 Views
The coronavirus pandemic has brought instability to the UK rental market, with tenants struggling to pay rents and landlords battling to keep their property operations moving in the right direction.
The unprecedented challenges we now face will vary between landlord, tenant, area and property type. Whilst COVID-19 has affected all of us, it has done so in a relatively individual way that reflects our own circumstances. For this reason, it’s difficult to issue any catch-all advice for landlords caught in the crossfire between outstanding payments and tenants that are unable to pay what they owe.
With these concerns in mind, here are some steps that landlords can take to protect their own interests whilst treating their tenants fairly.
Keep in contact
If the COVID-19 pandemic has not already forced you to do so, it’s time to forge a closer relationship with your tenants. Keeping in contact will help to manage expectations on both sides of the divide, and could help you to avoid any financial surprises if they fall ill or lose their primary source of income.
It’s also worth noting that 2020 has seen people spend more time at home – meaning that tenants may have identified maintenance issues that might otherwise have gone undetected by you or your agents. It’s important to stay on top of these, and there are plenty of direct lenders that are still operating through the pandemic if you need to borrow money for home repairs or improvements.
Consider moving to a guaranteed rent model
If the pandemic has taught us anything, it’s that nothing is guaranteed. If you’ve found yourself struggling to collect rents or find tenants during the course of this year, 2021 might offer the ideal fresh start along with the chance to move to a guaranteed rent model.
With so many estate agencies and lettings firms now offering this package, a guaranteed rent agreement may appear to cost more at first glance – but you can’t put a price on peace of mind. Moving across could provide you with much-needed stability in these uncertain times.
Stay on top of legal developments
2020 has been chock-full of surprises, not least of the legal variety. From a ban on evictions during the lockdown through to the end of the Tenant Fees Act 2019’s transition period, we’ve witnessed a sea change in the way property ownership and the rental market is managed at a legislative level.
As we move into 2021, it’ll remain as crucial as ever to stay on top of any legal developments to ensure that you comply with your obligations and that your tenants do the same.
Don’t fall off the financial wagon
Whilst the pandemic prompted some financial institutions to offer mortgage holidays and other such breaks, that doesn’t mean that all property owners will want to step away from paying off their liabilities.
If you find that your tenants are unable to pay their rent, or if you need to settle an outstanding bill, cash flow issues shouldn’t prevent you from doing so. By using an online credit broker such as Little Loans, you could access quick and convenient borrowing of between £100 and £10,000. Their service even ensures that you’ll be matched with the direct lender from their panel that is most likely to approve your application – preventing any unnecessary knocks to your credit rating.
Don’t forget the bigger picture
As we move into a new year and look towards a time when things can return to relative normality, it’s vital to stay grounded and to look at the bigger picture. In some cases, that might mean taking a short-term financial hit – but landlords should take heart from the fact that there are so many options available to help mitigate this.
All things considered, it’s worth looking things outside of the context of the COVID-19 crisis. If your tenants can’t pay the rent despite having a genuinely good relationship with you and your agents, it might be that hitting the eviction button could leave you without an income stream and struggling to find somebody new to take on the property.
Times may be tough, but managing a rental property doesn’t have to be.