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When looking at the rental market, the Landlord also needs to consider the style of Tenant he or she is looking for as to a degree this will dictate the style of property and whether furnishings are to be needed. To help, we have detailed below the main Tenant categories and details of what generally they are looking for:
The Professional Tenant is usually what most Landlords are looking for, but the property expectations are usually a little higher than normal residential tenants. The quality of property and style will usually be dictated by the budget, but in general Professional Tenants do prefer furnished properties and in the main go for either City Centre modern flats and apartments or houses in good locations. The professional Tenant, mainly due to their work is a lot more transient and therefore will usually go for 6 month tenancies initially. It’s not to say that an unfurnished property will not rent to a professional, everything is very much about supply and demand, but in our experience furnished properties will always tend to rent quicker.
The needs of the "Company Tenant" is very much the same as the Professional Tenant in terms of the type of property and location, sometimes Company Lets will be a little more demanding in terms of furnishings and will want items such as crockery and cutlery etc. The main difference between the two types of Tenant is the Tenancy Agreement used, for a professional Tenant who is an individual or a couple etc., then we would use an Assured Shorthold Tenancy Agreement, but if you are renting to a Company then the legislation is slightly different and they are not protected by the Housing Act 1988 and you would use a Company Letting Agreement.
Generally this category is everyday working people who generally want to live near family or near work and properties generally are in the suburbs rather than central. Families will obviously be keen to look at houses in a good area, convenient for schools and transport. If the Landlord is looking at buying a family house, then you must consider that other children may not have the same values as his own and may have been brought up in a different way. You do also get allot of working people looking for flats and apartments in the suburbs to be close to work or families. Generally most properties in this category tend to be unfurnished but Tenants would usually expect white goods. Tenants do tend to be more longer terms than Professional Tenants.
Generally Sharers will generate a much higher yield than perhaps a residential tenant, but the Landlord has to consider that with several people sharing the property and communal areas then this will add considerable more wear and tear to the premises. Another key point is that depending on the type of property, location and the number of tenants, the property may need to have a HMO license. If sharers is an option, then the easiest way is to treat the sharers as a single tenancy and have a group of 3 or 4 or how every many all named on the tenancy as “joint and severally liable” – this means that each person is equally liable for the property and if one leaves the responsibility falls on the other residents etc. Sharers will usually want a furnished property.
Students are very similar to Sharers and we would most certainly recommend Joint and severally liable contracts. Landlords do have to be aware that this is a difficult market and allot heavier on the maintenance, but a well maintained property close to the University should always let out, usually for a year at a time. The downside with students is that there seems to be a surge of purpose built student accommodation cropping up everywhere and this will have some distraction on the number of tenants looking for houses and it also substantially raises the quality bar.
Generally students tend to be a better bet from a rent payment perspective as we would always look at taking Guarantors.
This is a very big growth area fuelled by students coming over from China, the Middle East, Greece, Turkey and many other countries to study at world renowned UK universities. Generally such students are coming from wealthy families and have quite substantial budgets to spend on accommodation. Generally International Students will go for City Centre apartments and expect them to be furnished. There are a few downsides with this type of tenant, mainly their courses tend to run from September to May, so you may be unlucky with availability dates and also often it’s difficult to have Guarantors, but this can be overcome by either larger deposits or rent in advance.
Whilst this type of Tenant can be quite lucrative for the Landlord, it’s certainly not without its problems. DHS Tenants are usually much longer term, but the challenges are with the system and usually it’s a case of renting the property to a family or individual who doesn’t have the funds to put a deposit down or to pay the rent themselves so generally have little if any financial commitment to the property. Rent payments made by the Social are usually made in arrears and direct to the tenant, rather than the Landlord or Agent. Payments can also fluctuate dependant on the Tenants circumstances. The other downside is that if a DSS Tenant does get into arrears then the local authority are usually not very helpful.