Eviction costs can seriously dent your rental income
Letting Costs:
Research carried out by agents Benham and Reeves has produced some worst case scenario costs of removing a really bad and determined tenant, costs which are truly alarming.
These high figures would be a major concern at any time, but with the government planning to remove the Section 21 accelerated possession process they are doubly so.
Benham and Reeves think that on average, in this situation, it can cost a landlord around £30,000 to remove a really troublesome tenant when taking into account lost rent, the legal costs, and repairing damage to the property, which is very common in these circumstances.
Of course, most landlords never experience a tenant dispute that ends in eviction. Going the whole hog from a long notice period, court action to obtain a possession order, and finally employing bailiffs to evict can certainly rack up these sorts of costs, not to mention the stress that’s involved – more than a few sleepless nights over a period of 9 months.
But landlords can reduce the risk of this scenario by making sure that new tenants are vetted thoroughly. Using professional letting agents who are members of one of the recognised professional associations or, if you do the letting yourself, using a good tenant checking service such as www.tenantveify.co.uk is highly advisable.
Also, having the right insurance cover. Benham and Reeves claim that their research found that 13% of landlords don’t have any landlord insurance cover, let alone any rent guarantee and legal protection insurance. When the worst happens they have no cover for accidental damage by tenants, loss of rent if the property becomes uninhabitable or during an eviction, and no landlord’s contents cover. What’s more they are leaving themselves open to horrendous claims if the tenants or visitors should injure themselves and claim off the landlord.
Typically landlords will lose around nine months’ of rent payments while pursuing an eviction, which with average rents will amount to around £6,111. Add to that fixing up or replacing a damaged kitchen and bathroom, commonly the most abused, can cost around £8,000, and £4,875, respectively. Redecorating adds another £2,900, and new windows and or doors will add a further £7,000. Legal fees typically come in at £3,000.
Clearly this is a worst case scenario, but entirely feasible if the wrong tenants are taken on, and in some regions like London and the South East these costs can be even higher.
Director of agents Benham and Reeves, Marc von Grundherr, has said:
“Rogue tenants are a landlord’s absolute worst nightmare, and apart from the stress and time consumed dealing with them, the financial impact can be crippling.
“We’re not talking about a bad apple that doesn’t pay rent for the last two months of a tenancy and leaves a dirty protest on their way out.
“We’re talking about serious criminal organisations that know the letter of the law and every trick in the book to prevent you from getting rid of them, including how to stall the court date for weeks on end and how to deter the bailiff through threats of violence when they finally do call.
“At the very least, you’ll have a dangerously overcrowded sub-let on your hands but more often than not it will be a brothel, workhouse or drug farm.
“We’re not kidding when we talk about the complete renovation and refurbishment of the property afterwards either, as they will take every single thing they can and destroy whatever is left.
“It’s an extremely deep-rooted issue that goes beyond the tenant, even as far as the bribery of the concierge, and so you really are fighting from day one to get them out.”
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