By the day tenants are gaining unfair advantage!
"How long did you think you would get away with it?"
"I don’t know what you are talking about….”
This is a quote from a conversation that was relaid to me. It took place between a property investor and his tenant.
I won’t bore you with the whole story, but I will tell you what happened in short, and it is suggested to read carefully as it may happen to you.
A new property investor bought a house with cottage as an investment. Shortly after talking transfer he placed a tenant. For a few months everything was fine, then he got a frantic call from his tenant.
The call started exactly as above, the tenant went on to rant about certain things happening on the property. Amongst his complaints where overcrowding in the cottage, no receipts from the agents for his payments, and few smaller misunderstandings and technical problems.
The investor called me in distress for advice. This phone call had taken him completely by surprise and as he said, “I can't think anymore, it's totally ruined my day.”
The tenant was threatening with all sorts of actions and the conversation had apparently gotten somewhat heated as each tried to better position.
I asked him, “How did this happen, anyway?
His only answer was that he was not sure. All he knew was that the tenant was unhappy and that he had no clue if all the claims were actually true. But he was going to find out.
But before he carried on, I asked him; on what basis the tenant had threatened him?
You won’t believe the answer, then again, in this day and age, maybe you will…
The tenant, in irritation, went out of his to research the whole matter on the internet. Then he called the Landlord with all sorts of quotes based on half knowledge, some basic understanding, and conclusions.
Now to understand this investors circumstances better. This investor has a day job and has never researched such matters himself. He owns the property for the last few of months and placed a tenant in the property. He is not conversant in any landlord or tenant law or practices. He left all that to an estate agent after he had found the tenant. He employed the agents services to ensure that the administration is off his head so that he would save some time. He didn’t even know how to approach the situation, let alone help negotiate a solution to everyone’s benefit.
As you may see, knowledge and information of any type, right or wrong, is so vastly accessible in today's world that it has become imperative that property investors in the residential by to let market are knowledgeable and have their facts right.
In this case, the investor could not even evaluate the situation, as he had no knowledge of what was allowed or what is right and what is wrong.
The best he could do is promised the tenant that he would speak to the agent and get to the bottom of things.
While helping him decipher the issues at hand, we finally concluded that both the tenant and the agent had some fault. However, by this stage, the investor had started his problem solving at a very disadvantaged position.
If the investor had had at least a basic knowledge, he could have calmed the tenant down and told him how he will solve the problems. Yet, in his uncertainty, this didn’t happen.
With the amount of information available, only a mouse-click away, what are the odds that this tenant (or any other), now very much less happy, will try to find a way or at least try and cause problems when getting irritated. The chances are very high.
But that is not all. What if the investor, by mistake, and lack of knowledge, had some illegal clauses in the lease resulting in a situation where the tenant could actually take legal action against him? Fortunately this was not the case in this story, but it could very easily have been.
The point is simple, tenants are getting ahead, and often, this can cause unnecessary problems for buy to let investors. Today one case, tomorrow a dozen.
As the market turns in favour of buy to let investors, it stands to reason that property investors who employ letting agents, should expect the agent to take care of everything. However, what if they don’t? What is the investor supposed to do with no knowledge?
hether you are a residential property investor, employing the services of a letting agent or not. It is now become a necessity, not a luxury, to get all the correct knowledge in order to run a successful portfolio.
