Tenant from Hell Walks Away After Wrecking Property

A landlord has been left picking up the pieces after a tenant wrecked his property and then walked away from court without paying a penny.  £20,000 of damage was caused in total rendering the property inhabitable until the damage is put right.

Teenage tenant, Lee Davis destroyed the flat he was renting in Darlington following a request to vacate the property due to non-payment of rent.  Most tenants would simply accept this as a fair request, but Mr Davis was intent on going on a rampage instead.

The Judge, whilst admitting that he would like nothing better than to make Mr Davis repay the costs of repairing the property, was only able to give the defendant 300 hours of unpaid community service as punishment.  He said his hands were tied as there was no way that Mr Davis could find the funds to pay for the damage.  The defendant walked away whilst the landlord was left open-mouthed and out of pocket.

These problems are actually fairly common in the rental world.  Often, when discrepancies arise between tenants and landlords they are settled amicably, but occasionally a tenant will take umbrage over a request or issue and set about destroying their surroundings in anger.  Many of these issues can of course be avoided by carrying out thorough checks of tenants before agreeing to let the property.  The good news is that the majority of tenants are law-abiding, respectful and honest and will give no cause for concern.

We don’t believe thorough checks were made in the case of Mr Davis and that if checks were made there was probably fraudulent information supplied or shortcuts taken.  A thorough tenant check requires credit checks, personal character references, financial checks, and employment checks to ensure the tenant is who they say they are and that they can afford to pay the rent each month.  £20,000 is not a figure that any landlord wants to think about coughing up and we think this landlord probably cut their losses and sold the property in the end.  A big price to pay for not checking up on a tenant.

Any landlord who has suffered losses because of malicious damage will understand how important it is to conduct proper checks of their tenants.  Of course, even a tenant that looks great on paper can suddenly turn into whirling dervish when tempers fray and there is little you can do in these cases.

In addition to carrying out the right level of checks you should also add malicious damage to your landlord insurance.  Many low price insurance policies won’t usually include this as standard so it’s worth covering your back and your property.

When is the right time to sell your buy to let?

No so long ago, buy-to-let was viewed as a pretty sure bet by those with money to invest; with the potential to make big long term profits, and a good interim income, they presented an attractive way to invest your money.  But with current economic volatility, and the fluctuation in housing prices, it’s no surprise that some landlords are now rethinking their portfolios.

Digging into our own data (here at Simply Business) we can see that when we compare the average market value of those properties insured with us in 2008 vs 2010 there is a drop of 6%. This is particularly significant when you consider that prior to 2008 we’d seen prices appreciate year on year.

I guess the question on many landlord’s lips is – are we going to turn the corner and see property prices begin to recover? Or,  is now the time to sell that buy to let? If you too are in this position it’s important not to act hastily – there are many things to consider when making the decision about whether or not to sell your buy-to-let property.

First and foremost you need to remind yourself of what your original investment aims were when you bought your buy-to-let.  For the majority of landlords this kind of property is a long term, high-yield investment, as opposed to an investment for short-term capital appreciation.   And if you fall into this category then it’s important to keep the long term in sight.

During the spring of 2010 thousands of owners off-loaded their buy-to-lets because of fears that the new government was going to raise Capital Gains Tax to 40 or 50%.  In the end the increase (and only for those who fell into the high-tax bracket) was to 28%.  This just goes to show that having a knee-jerk reaction in the world of property investment can be costly.

Similarly, to panic sell a property because there is a dip in market prices can end up being a mistake.  Many landlords feel that if they fall into negative equity they should get rid of their buy-to-let.  But this is really the worst time to sell.  Prices rise and fall but over the longer term they tend to follow a significant upward trend.  And the truth is that negative equity is only a problem if you sell, or find yourself in a position where you are forced to sell.

A long period of vacancy may also tempt landlords to sell their property. If this is the case for you, but you’re currently in negative equity it is important to note that there are other options open to you.  It’s always worth doing a bit of research into other rental properties in your area.  It can take only a small amount of money, and a little effort, to bring your property up to a standard where it will be easier to let.

But if you’ve reached a point where you’re ready to sell simply follow the usual property rules.  It’s well known that between March and July is the best time of year to put your property on the market.  And keep your eye on house prices and changes in tax and interest rates.  The last thing you want is to be selling in a buyers’ market.  But just as house prices fall, they also spike.  If you see a number of houses under offer in your area it could be a prime time to catch the buyers who’ve missed out.  However, if your neighbours have saturated the market with for sale signs that don’t seem to be going anywhere then it’s probably a good idea to hold off.

Overall, the most important thing to remember when you want to make a profit out of selling your buy-to-let is to not panic because of short term problems. Take the time to think through all of the issues at hand.  And always remind yourself – making a high profit on the property market is a long term investment.

Julian Watson is a guest contributor to The Big Property List blog. He’s spent more than ten years in the property industry and is the Landlord Insurance product manager for SimplyBusiness.co.uk.