Using a vehicle as a ‘deposit’?

Using a vehicle as a ‘deposit’?

16:32 PM, 23rd June 2015, About 6 years ago 29

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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. Using a vehicle as a deposit

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

Regards

Luke



Comments

by Monty Bodkin

16:59 PM, 24th June 2015, About 6 years ago

I'm not trying to be confrontational and I have great admiration for what you do but you and Mick are victims of your own making (Rob's reasons are more altruistic).

I can’t put rents up too much or take a deposit because along with the first month’s rent, it is too much for the local folk to raise.

If you weren't there, they would have to, as "posh DSS only" landlords like me, wouldn't take them on otherwise.

I wish the Council would follow through with the threat of refusing to assist persons who have made themselves homeless, particularly through non-payment of rent. If they messed up and knew they had nowhere else to turn, they might think twice about causing havoc.

Councils/ Government would have to do some radical changes if landlords like you and Mick weren't there, it is all part of the problem. Tenants would be forced to think twice about causing havoc if no (legal) landlord whatsoever would take them on.

Sorry, gone off topic with a very interesting thread.

by Robert Mellors

0:08 AM, 25th June 2015, About 6 years ago

Luke, do you accept any tenants without a guarantor? I find that most of my potential tenants, particularly the single people applying for a room in a HMO, do not have a guarantor. In this situation would you simply decline the application, and wait for someone to apply who does have a homeowner guarantor?

by Mick Roberts

7:26 AM, 25th June 2015, About 6 years ago

Well yes Monty, fair point. But I suppose I’ve had to make a living, so I am here.
And maybe for only 20 30 quality years, so han’t got ruddy time for the Govt to do some Radical changes.

But I do think, as much as I try & hope, certain people, a so many segment of society, so many hundred thousand, don’t change.

Some tenants don’t think of next week, next month, next year.

Please tell me Poss DSS, because I want to be leaning that way, now I’ve been doing this job about 18 years.

Yes me too Rob, is listening to Luke Guarantor, ALTHOUGH if it takes 50% of time chasing ‘em up, free time is something I want more of going forwards.

by Monty Bodkin

9:58 AM, 25th June 2015, About 6 years ago

Reply to the comment left by "Mick Roberts" at "25/06/2015 - 07:26":

"Please tell me Posh DSS"

Making wild discriminatory generalisations here but "Posh DSS" is what I call the better end of benefits tenants.

Probably the opposite end of tenants you take on.

They have home owning, full time working guarantors- usually parents or ex husband. Middle class, well educated, articulate, no facial piercings or tatoos, never done drugs (IIRC, you said all of your tenants smoked dope), non smokers, pet owners (one golden Labrador or a hamster, not a pack of staffy pit bulls), willing and able to pay a deposit, rent in advance and a top-up, no adverse credit, traceable history, decent car, one or two kids from the same stable ex partner, were once in full time employment, often working part time or on benefits only for genuine 'daily mail' type reasons, none of their friends or relations are on benefits.

They often make better tenants than 'working professionals', stay longer and look after the property.

Some nasty, sweeping generalisations there just to make the point but most 'posh' landlords won't touch any DSS whatsoever, I get to pick and choose the cream. About 20% of my tenants are on benefits.

by Robert Mellors

10:20 AM, 25th June 2015, About 6 years ago

Hi Monty, I seem to recall that we work in a similar geographical area, so I guess I must get all your rejected applicants!

by Luke P

10:53 AM, 25th June 2015, About 6 years ago

Monty,

Whilst there are different 'classes' of HB tenants where I am based, none of them quite reach the dizzying heights of 'posh DSS'. We have the complete feral scum (who I avoid) but even the best of benefit tenants here.

It's a very unique place is Grimsby -there are no students, we are very geographically and infrastructurally isolated, there are no professional (lets), no apartments, or fancy open-plan flats, just those that can afford to buy and those that are on benefit. 70% of the population earn less than £15k.

Whilst I can be picky to a certain degree, the best I can hope for doesn't quite fit your posh DSS list :/

by Mick Roberts

6:56 AM, 28th June 2015, About 6 years ago

Yes, I do have some not great tenants, but if posh is 10/10, & terrible is 1/10, some of mine are 10/10 at start. Or I aim for 10, sometimes get maybe 5.
I do try to avoid the opposite end of posh.

Gees, u have some criteria there, I’d love to get all that. I think in maybe the parts of Nottingham I deal with, I would struggle with DSS tenant that had all them qualities, if they just have the car, they normally at the top end of the scale for me.
But good points in there, something to look towards the future.

I suppose really I’d have to do the house right up for these people I reckon, & I’m probably in a circle where last tenant wrecked it, it don’t matter if next tenant wrecks it. ie. they move in poor decor etc. And don’t mind & want to do it their way.

Ha ha Rob, yes the rejected applicants must be coming my way.

Grimsby looks a good place for HB.

by Luke P

11:11 AM, 28th June 2015, About 6 years ago

Grimsby is a great place to invest...if you can handle the clientele. I'm a bit like that now, Mick...the previous tenant didn't look after it all that well, the new wont is unlikely to either so I just don't bother with tidying them up very much now.

by Claire Oswald

19:39 PM, 9th July 2015, About 6 years ago

Reply to the comment left by "Monty Bodkin" at "25/06/2015 - 09:58":

"never done drugs" - How on earth do you know that?


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