Using a vehicle as a ‘deposit’?Make Text Bigger
I should perhaps start by saying that I operate in one of the poorest areas of the country and what goes on in the middle class rental market of the south of the country cannot be applied to how the market operates where I am.
I am renting to the bottom of the socio-economic scale and have been for near on 30 years now. I have well over 100 properties of my own and manage another 350+.
I do not take deposits and have not done so since 2007, although I am familiar with the rules surrounding monetary deposits. My security however is in the form of a homeowner guarantor. A good proportion of the tenants locally leave owing arrears and the properties in a mess. Almost everyone ends up paying (or rather the tenants’ guarantor does), with me winning 99% of cases. This is becoming a little tiresome though and more often the tenants are quite happy to stitch ‘granny’ up by leaving her to pick up the pieces (in the form of being sued).
What I have been pondering is the possibility of taking a vehicle as a form of deposit for a rental property -a bit like a ‘logbook loan’ is secured against a car. This is the sort of thing tenants would understand…it’s on their level as they are well used to borrowing money from these type of loan shops and an instant justice ‘hit’ in the form of me taking away their car (funny how they can barely dress their kids and don’t own a vacuum cleaner, yet have a car).
Could this be done? What should I consider when looking at this option? Would I need a credit licence etc?
After all, you can’t put a car into a deposit scheme and this would be in addition to a homeowner guarantor.
Perhaps I am barking up the wrong tree…
The reason for not taking monetary deposits are numerous, but mainly because the tenants here cannot raise the rent AND a deposit, as well as it being a complete faff to get the thing out of the scheme (and not nearly covering the arrears/damages caused).
Looking forward to reading your comments
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