Single parent families (who have recently divorced) and ex-services personnel (who must give up their military quarters within 90 days of leaving the Armed Forces) have proven themselves to be excellent tenants for me over the years.
However – all of these tenants are claiming DSS benefits!
Most landlords and letting agents actively discriminate against “DSS tenants” because they are in receipt of state benefits and they are perceived to be bad. Yet the landlords largest cost is the loss of rental income during void periods and there are literally thousands of DSS tenants queuing at the local Council that need housing.
So is it financially wise or foolhardy to deliberately keep an investment property empty (waiting for a working tenant) rather than accepting a benefit claiming tenant?
Discriminating against someone because they claim a state benefit is not illegal but it is ironic as most landlords and lettings agents are claiming state benefits themselves (e.g. child benefit, child tax credits, working tax credits etc) as well as using state facilities such as schools and the NHS.
In difficult economic times we should reflect that we are only a negative life episode or two away from needing state help ourselves; maybe a failed relationship; a few missed mortgage payments; a lost job; the death of a loved one.
“No DSS” is a phrase that accompanies most rental property advertisements although it is technically incorrect as the DSS never really existed and is a malapropism quoted by landlords!
The DHSS (Department for Health and Social Security) did exist but this was renamed to the DWP (Department for Work and Pensions) about seven years ago – so if you don’t want benefit claiming tenants then the correct wording is “No DWP” not “No DSS/DHSS”.
I’m not advocating that every DSS tenant is good (as they are clearly not) but I also think it is wrong to assume that every DSS tenant is bad. Landlords will always tell you about their bad DSS tenant – but keep quiet when they have found a good one!
Surely, if we could find a way of selecting the good DSS tenants, whilst avoiding the bad ones, then we would be able to eradicate our void periods forever and maximize our overall investment income. I’ll write a future blog on some of the strategies that I have used to try and achieve this.
Personally, I judge my DSS applicants on a case by case basis.
I seem to have specialised in helping single parent families who were previously buying their own home before their relationship broke down and were forced to sell as they separated. The local primary school secretary (who rented from me when her relationship broke down) often recommends me to divorcing mothers as they share their marital strife with her at the school gate!
I also try to help ex-services families as they become unemployed (when they leave the Armed Forces) as they are well known for the immaculate way they take care of their military quarters as they are “marched in” and “marched out” after each tour of duty.
I know that we can’t help every DSS tenant – and many don’t deserve our help – but if we are selective then we can radically improve our return on investment as well as helping some local families in your community.