We live in a generation of renters who are unable to buy a home because, although many of them can afford the ongoing costs, many can’t raise the cash to afford a mortgage. Rental properties offer a more accessible alternative, but some landlords are failing to attract tenants because high and unfair deposit systems make it just as unfeasible for tenants. Here, we’re going to look at how to keep it fair for both sides.
Reduce your risk with more frequent inspections or cleaning services
One of the larger issues facing landlords is that they feel they have to hold larger deposits because of the risks to their property. The deposit is your insurance that too much damage won’t be caused. However, you could get away for asking for less of deposit by forming a contractual agreement to inspect the property a little more often, such as twice a year instead of at the end of a tenancy. What’s more, you can recoup the costs and ensure the property remains in good condition by offering housekeeping and landscaping services as an extra with a fee attached. Making deals the benefit both tenant and landlord establishes a sense of good faith, that is likely to make the relationship and the inevitable turnover period better for both parties.
Make turnover easier for all
The turnover process is tiring for landlords and tenants alike. Landlords have to ensure that a property is vacated as soon as possible to start cleaning, advertising, and welcoming new tenants. Meanwhile, tenants need to raise the funds to pay a second deposit while still living in the property they want to leave. A deposit release scheme, in which a landlord releases some of the deposit after an initial inspection, can help tenants leave quicker. In turn, your letting agency can start advertising in advance, knowing that a tenant isn’t going to be lingering too much longer because they aren’t able to acquire the funds they need to move. A shorter turnover period helps everyone.
What about deposit replacement schemes?
There are certain insurance providers that do allow for zero deposit agreements. With these, landlords don’t have to ask for a deposit up front that can make a rental all the more appealing to potential tenants. However, the premiums on these schemes do make it much less profitable for landlords. These zero deposit insurance schemes, paired with custodial agreements that allow landlords to charge for housekeeping, could offer a real solution that benefits both parties. We simply need the insurance providers to charge lower premiums to landlords. In the meantime, a deposit release scheme might be the best solution for all parties involved, as things currently stand in the market.
The landlord has all the power when it comes to enacting a deposit system but stands to lose the most if they fail to get tenants because their current system is off-putting or too demanding. The only deposit system that will work for you is the one that works for your tenants.
