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Deposit vs Higher Rent


Jamie McLaughlin

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Hi All,

 

I'm looking for some advice - I'm about to put a tenant into my property and have now completed credit checks (references to follow) with a view of getting the tenants signed in soon. I've identified an opportunity though...

 

The property is letting unfurnished with no white goods. The tenant did ask whether we'd be willing to take an extra £50 per month in exchange for putting in a washing machine / fridge freezer. We've refused that as we don't want the hassle or immediate outlay, but we're unsure as to whether another option isn't available. Does anyone have experience of letting with no deposit but increasing the rent?

 

The tenant has a good credit score and rented the previous property for 6 years with their partner and two children. if we were to increase rent by £50 for the first year and scrap the deposit, we'd collect an extra £600 that wouldn't have been collected previously, never have to give that back, but in addition make it appear like we're doing the tenant a favour by giving them the financial space up front to buy white goods.

 

In the grand scheme of things, the deposit would only be £450, which means that even after the first three months we'd be just £300 down in terms of having a tenant void unexpectedly. That's on the assumption that we can keep the whole deposit without having to challenge them legally too. In this second scenario, getting to the full 12 month term would see us bank £600 in profit and be able to lower the rent at the end of the 12 months as an incentive to stay.

 

Does this seem like an option? I'm not even sure I've made sense...

 

Jamie

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Worth adding that the property is in a very strong position to let. We had 9 viewing requests within 48 hours of the advertisement going on Gumtree and the first tenant who viewed the property immediately accepted - it's totally possible that we could have the place let out again within two weeks if the tenant was to do a runner.

 

Jamie

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Thanks Richard! It appears like we're going to progress in that fashion and the tenant was actively quite keen on the idea - they accepted with no reservations and immediately asked for the sizing of the areas to start shopping for the white goods.

If the worst comes to the worst I might lose a bit of cash, but it'll be no more than £400. Considering that's split between my partner and I and also the property lets for more than that each month, I feel like we could overcome it.

Thanks for the advice and I'll try to return to let guys know how I get on with this.

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