Providing a home for someone who was homeless is something that few landlords consider and very few letting agents specialise in. Referencing is very different and there are greater risks than there are with other types of tenant but with the right processes, it can work and the yields can be much higher.
Property Expert Series: Tracy Wardle from from Abode Property Management
- Part 1: Introducing Tracy Wardle from Abode Lettings
- Part 2: Successes and Mistakes
- Part 3: What Are the Best Rental Areas in Greater Manchester?
- Part 4: What Questions do Landlords Need to Ask Their Letting Agents?
- Part 5: Tenancy Fraud – Possible Problems for Landlords
- Part 6: How has Manchester’s Rental Market Changed in the Last Few Years?
- Part 7: What Is a Letting Agent?
- Part 8: How to Avoid Tenants From Hell
- Part 9: Housing the Homeless and Local Housing Allowance
- Part 10: What Does the Ban on Letting Agent Fees Mean for the Industry?
Amy: Tracy, we’ve touched on this already but I want to go back to it because I think it is really interesting. You’ve worked with me and probably with other people in other organisations.
You have worked to house homeless applicants before and some really quite vulnerable people. I know some of the service users that I’ve referred over to you have been street-sleepers, long-term rough-sleepers, veterans with quite poor mental and physical health conditions and they have been thrilled to move into properties and thrive and have that opportunity.
And that must be… For you, as a letting and management agent that must be… You’re going over and above, really. You are taking on quite a lot of work there. That’s not a tenant that you are going to give the paperwork to and never see them again for three years but still receive the rent.
Tracy: I don’t know of any other agent in Manchester that does it, to be honest. And everybody that we speak to, would not do that. Not in a million years.
But that said, it can be very rewarding.
Amy: And again, I suppose, if you are using adequate referencing procedures and a rough-sleeping, homeless person is probably not going to pass a credit check.
Tracy: We don’t do any references.
Amy: But there are ways you can have a look and speak to organisations who are perhaps working with the tenant. You can, as we’ve talked about in a previous question, look through potential documentation that they might have and try and explore their history.
So, you are not going to reference them in the same way as you would do a traditional applicant but you can still do something to get a bit of a picture of the person.
And again, your gut feeling will tell you, ‘Do I think this is going to work out?’
Tracy: Yes. We, again, have an extensive list of questions but they revolve around mental health, drink, drugs, support, ‘Have you been in prison?’, social workers, care workers. So, you know you’ve got a full background.
They are always, unusually, very honest. Probably, some are too honest. Oh really?
Again, we’ve got to look at their situation. Can we help them by firstly, providing them with a home but then not supporting them all the time? Should they need anything, are we going to be able to communicate with them and support them, if they have an issue?
Amy: Because the last thing anyone wants to do is set something up to fail. That’s the problem I’ve had in the past when I have procured housing for people and perhaps they have not been ready or the support has not been in place.
But I think, in allowing what you are doing at Abode, in just having this small subsection of your business which is reserved for this type of tenant group, is amazing.
As you say, I don’t know of any other agents in the local area that provide that type of service and that’s really something I think should be shouted about.
So, I’m going to do loads of promotion for that when I get back.
Tracy: There is also a profitability side for landlords. It’s a business decision that we made. The setup that we have got is that these people can be sharing and landlords are financially benefitting from that.
So they are taking a massive risk but they are benefiting. They are almost doubling their rents in some cases.
Amy: Absolutely. And that’s the way that I worked with social property investment, to persuade investors and landlords to take more vulnerable tenants or tenants who are in receipt of welfare.
It’s about giving them something of value on each side and making sure that… We look to maximize the profit and the cost-effectiveness and then to mitigate and minimize the risk.
So, they think, ‘Well, I’m going to make loads of money and it’s actually good that all the worries that I’ve had have been thought about. So, there’s a way around them. Great!’
Tracy: All the worries they have is that we are completely transparent. ‘This is what you are getting and this is what could happen. On the plus side, this is what you will achieve with your rental income. The decision is yours’.
We’ve had some really good success stories.
Amy: I think I’m going to have to come back and re-visit you, Tracy, because I would quite like to put some articles out about how processing works in the long-term and how landlords can replicate those types of projects.
There is obviously a huge need.
Tracy: Yes, there is a massive need and it does work. It doesn’t work all the time but it does work. And we’ll have to discuss that further.
Amy: Fantastic. And I’ll have to refer any landlords that come to me, now because I’m not managing anymore.
Tracy: So, that works very well.
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