When you buy to let, the benefits seem obvious: the rental income will pay off the mortgage and after a given time frame you will receive a healthy supplement to your income from your additional property or properties.
However, letting out a property can equally be a nightmarish experience which results in you losing money and possibly defaulting on your mortgage. One idea is to take out Landlord’s insurance to cover for unforeseen circumstances such as your tenant failing to pay the rent and for legal fees associated with debt recovery.
If you are already in a situation where your tenants are living in one of your properties and not paying the rent, the obvious solution is to first communicate with your tenants, and if all else fails to evict them and get other tenants into your property, but you need to follow the correct procedures first. And always remember the golden rule: keep a record of payments and paper trail of correspondence.
Contact your Tenant to Request the Payment of Monies Owed
Follow these steps:
- Send your tenant a formal demand by first class mail – wait two weeks and then proceed to step 2 if you still haven’t received payment
- Contact the guarantor if your tenant has provided one, advising them that rent is in arrears
- Still no luck? Inform your tenant via writing once again that they are in arrears and let the guarantor know via writing that you will be taking legal action if the rent is not paid.
Eviction and Legal Action
Follow these steps:
- If you still have not received the rent owing to you, you need to give your tenant notice to quit to inform them that they must vacate your property.
- If they have not vacated your property within the time frame given on your notice to quit, you now need to give them notice to seek possession – now you do need to take legal action by applying for permission to take possession
- The last step in getting your tenants evicted is to apply for a warranty for eviction where bailiffs will remove the tenants from the property at which point you can have your locks changed and request that the court makes a judgement for the rent in arrears and reasonable costs incurred.
Remember, that legal costs can also put a dent in your pocket, so the best way to protect yourself financially if you have rental properties is to take out landlords insurance that includes legal protection.