Apr 06 2020 16 mins 5
RESOURCE LINK
- The HMO Experience Website (http://www.thehmoexperience.co.uk/)
- 11 Steps to Running your successful HMO Property Business and other FREE RESOURCES (http://www.thehmoexperience.co.uk/resources-page)
- Sign up for weekly hacks and tips for starting and scaling your HMO Property Business (http://www.thehmoexperience.co.uk/)
- For referencing and Rent Guarantee Insurance options, look at OpenRent and Advance Tenant Referencing.
IN THIS EPISODE
Your podcast Hosts Matt Harris of MiRentCo London & Jamie Madill from Jamie Madill Property talk about all things related to referencing & security deposits when checking housemates, customers and tenants into your HMO property.
Looking for some handy tips and tricks for simplifying this process then listen to this episode of The HMO Experience Property Podcast.
EPISODE HIGHLIGHTS
- Introduction [00:00 – 01:00]
- Different Types of Rent Security [01:00 – 11:30]
- Referencing Options [11:30 – 16:10]
KEY TAKEAWAYS
- The legislation changed in June 2018 which meant that agents can only take certain payments from the customer; a rent deposit equal to 5 weeks rent, a holding deposit that must be returned or deducted from the security deposit on move in, arrears fees and rental payments.
- Deposits must be deposited with a Government approved deposit holding scheme. It is illegal not to register the deposit with one of the approved schemes and it must be done within 30 days of the tenancy start date.
- Deposits can be held under an assured scheme (money is not in your bank account) or on an insured basis (money is held in your business client account)
- An alternative to deposits are Rent Guarantee Insurance (RGI) which is an insurance product based on the customer credit rating and their affordability to pay.
- RGI, depending on your policy, will cover rental arrears, damage and legal costs if you need to evict your customer. Policy cover varies but is normally between £25,000 and £50,000 cover per room.
- RGI policies are normally on a 12 month term which means that if your original customer stays in the room for 6 months and the second customer is in the room for the second 6 months, providing the second customer passes affordability and credit reference you don’t need to pay the policy premium again.
- If you take a deposit, then it must be returned at the end of the tenancy agreement. (more on that on a latter episode).
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