Dealing with a Problem Tenant
Buy-to-let has been a very difficult business model over recent times. The credit crunch combined with the crash of property prices has put many buy-to-let landlords in difficult positions. The last thing any landlord wants is a problem tenant, but as everything else in the economy becomes more difficult, the number of problem tenants has also risen.
This is not always their fault. In many instances they are victims of the same economic factors that are affecting their landlords. A tenant may be the best tenant in the world under normal circumstances. They have always paid their rent on time, they have taken care of the house and have tended to the garden. In fact they were such model tenants that when they wanted to increase the time scale of the tenancy agreement, you were more than happy to oblige.
Then suddenly everything changed. The rent payments were progressively later, initially a week, then two, then a month. Your management company informed you that the tenant had been made redundant and was now dependent on the DSS for paying the rent. Of course you are sympathetic, but this is a business arrangement and things have suddenly taken a significant turn for the worse, particularly as you have now decided that you need to sell the property.
Once the DSS are involved in paying the rent, it is extremely difficult to persuade assured shorthold tenants to leave even when the tenancy agreement has expired. Even after you have issued a two month notice for them to leave, in many instances the DSS are unlikely to cooperate. It might be necessary for you to obtain an eviction notice from the court before the DSS is willing to re-house them, and this can be very time consuming and expensive.
In these circumstances it might be worth considering selling the property with the problem tenant in situ. Of course it would be just about impossible to do this on the open market, but there are a number of companies that make a business out of just this kind of purchase such as swift capital. Naturally they discount the purchase price by about 25% of that of a similar property with vacant possession, but this could be your best choice.