The accidental landlord

Here’s a tip for male tenants: if your landlady calls round at short notice and catches you nearly naked, don’t try to chat to her in your underpants, because that’s only going to make you both uncomfortable.

I’ve just spent five minutes exchanging small talk with a tenant while he was wearing only his boxers and, call me old fashioned, but I think the conversation would have gone much better if he’d gone to put on some clothes first.

On the way home, I spotted an ad in the local estate agent’s window for an ex-local authority, ground-floor two-bedroom flat, which was priced well below market value. Thinking it would make a great buy-to-let investment, I popped in to find out what the catch was.

I didn’t need to try out my thumb screws on the agent; he quickly volunteered the reason the asking price was so low. The flat was let to a tenant on housing benefit, who was refusing to leave because the local council had been unable to find her anywhere else to live.

According to the agent, the council had told her to stay and wait for the landlord to evict her but, rather than go through the hassle, he’d dropped the price of the flat in the hope of finding an investor prepared to take it on with the tenant in occupation.

On the face of it, this wasn’t such a problem for me. The rent she was paying was only slightly less than I’d get from a private tenant and, more importantly, it would cover the mortgage. However, I was uncomfortable at the thought of inheriting someone else’s tenant.

If I’m honest, I was also not terribly keen on acquiring a tenant on benefits, even though I have often toyed with this idea. I was put off recently by a report which suggested that 87 per cent of landlords who have let to tenants in receipt of Local Housing Allowance — housing benefit for those in privately rented lodgings — have suffered rent arrears.

On the other hand, James Davis, a landlord who runs the online lettings agency Upad, told me he absolutely loves LHA tenants — he can’t get enough of them. He says they stay for twice as long as private tenants (the shortest LHA tenancy he’s had was for five years) so he doesn’t have many voids. Also, in his experience, families on housing benefit tend to view their rental property as a home so they take better care of it than young professionals, who see it only as somewhere to crash. As there’s a dire shortage of accommodation for tenants claiming LHA, Davis says landlords can afford to be picky and select only those they are confident about.

However, he admits that dealing with tenants on housing benefits is not, as he put it, for the faint-hearted, and I’m not sure my heart is in it. For a start, there’s a lot of paperwork (I hate form filling) and it would be harder to get a mortgage as lenders generally don’t like LHA tenants.

This particular tenant is already proving to be quite a tricky customer, or so said the agent. He couldn’t show me round the flat for a few days, he said, as she was giving him only very limited access. I decided I might as well go and take a look at the flat from the outside in the meantime. As I walked past the front, a man appeared at the living room window wearing only a pair of shorts. I’d seen enough nearly nude men for one day, so I told the agent I’d give it a miss, thanks.