DSS Tenants – another issue

by Mark Trenfield

22:38 PM, 18th July 2012
About 9 years ago

DSS Tenants – another issue

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DSS Tenants – another issue

DSS Tenants - another issueThe good thing about being a landlord is that I not only generate a fantastic monthly income from my property investments but I also have the power to make a positive impact on the lives of some vulnerable people “DSS Tenants” living in my community by providing them with a home (when other landlords might not).

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.

Comments

6:33 AM, 5th January 2013
About 8 years ago

Tomaasz you put forward very eloquent rationale as to why LL should consider tenants who may be in receipt of benefit.
However you fail to relise the crux of the matter.
Let's say you were a millionaire; but for various reasons you receive benefit.
If I had RGI check carried out on you you would probably fail.
How could you possibly guarantee to me that you a milionaire would pay the rent?.
The maximum deposit I could obtain would be 2 months worth of the monthly rent and 1 month's rent in advance.due to issues with premium tenancies etc
You may have brilliant credit references etc; but if you failed the RGI check I would NOT take you on as a tenant.
You may have a guarantor that passes the RGI check and if so I would take you on.
You see it doesn't matter how rich you are, you can still stop paying me my rent and there is nothing I could do about it.
I would have to evict you and try and pursue you through the County Court for rental arrears.
With no rent coming from you, who is going to pay my mortgage!?
It can easily take a year to evict a tenant during which time the property will have been repossessed by the lender due to no mortgage payments being made.
So you see LL don't have anything against benefit claimants it is the eviction process which puts LL off and we cannot obtain RGI on these benefit claimants..
There are; however, some alternative rent insurance products which have recently come to the market and it may well be that such new solutions would be acceptable to LL if as it seems the LL is GUARANTEED to receive rent if the tenant won't pay.
So don't blame the LL; he is only reacting in a way to protect his livelihood,; which in my case is not to accept tenants who don't qualify for RGI!
So you see it does NOT matter how good a tenant is; without RGI in place on the tenant, the LL can still face financial ruin if that great tenant stops paying rent.
With RGI in place it doesn't matter as the rent will be paid by the RGI company until the tenant vacates or is evicted
What we LL need is the facility to boot out a tenant as SOON as they stop paying rent.
If LL could do this even I would be prepared to take on all sorts of weird tenants; because I would know as soon as they didn't pay rent I could have them removed from the property by the police.
This situation will NEVER happen; so I am stuck renting to tenants who pass RGI checks.
Believe me I would love to rent to you sound tenants; but no pass RGI check!, No tenancy with me!

17:10 PM, 20th March 2013
About 8 years ago

i am a housing benefit tenant and have always payed any top up needed but i must admit i prefer to have rent direct to landlord and i always leave the houses i rent in better condition than i found some of them and without bed bugs its the bad tenants and cannabis growers that give gud tenants a bad time and make it harder for us now i have got to go thru it all again because of this stupid bedroom tax i need to raise at least 900 to get anywer

20:30 PM, 20th March 2013
About 8 years ago

I feel for you as you are clearly a victim of the system.
For a LL to take you on would you sign a tenancy if it stated and was legal that in the event of you not paying rent that after 1 month the LL could have you removed.
Do you think that would be fair or do you think a LL should subsidise your 'lifestyle' until you are evicted!!??
This early eviction would ONLY apply in non-rent payment situations.
Could you take on a lodger without any effect on your benefits?
Could you reduce any 'lifestyle' elements to enable you to remain.
Could you not source a tenant on spareroom.co.uk without telling anyone.
Who would know!?.....................you would have a regular visitor wouldn't you!?, They wouldn't be on the electoral roll or council tax register would they!! !?
Could you NOT get a job!!!??

4:20 AM, 26th March 2013
About 8 years ago

with regards to Paul Bennets comment below:
(Who would know!?)……I would know
(you would have a regular visitor wouldn't you!?),
I don't want to do anything illegal no i don't want a
stranger in my home nr my young ward
(They wouldn't be on the electoral roll or council tax register would they!! !? ) I don't want to do anything that would end up me being
homeless I have a child to think off.
(Could you NOT get a job!!!??)
would you employ someone who after working 3 days needed a week off to get over it i have arthritis from hips down back problems carpal tunnel in both hands , type 2 diabetic asthma depression and a few more to be going on with I may have found someone to help us we go to look at a house on Wednesday fingers x

Ashburnham Insurance

11:59 AM, 11th November 2013
About 7 years ago

We have many customers get their landlords buildings and contents insurance with us that are shocked to find that in most cases it is the same price to have tenants who are in receipt of benefits as it is to have working tenants.

Insurance cost is therefore not a reason to be put off by having DSS tenants.

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