Tenants - pay fair or its the streets
photo credit: pingnews.com
One day you’re sitting in your lovely rented home, thinking how lucky you are not to have bought before the market when mad, and isn’t it great you’ve got no mortgage to pay? And the next, you’re standing in the front garden with your bags packed.
A stark warning comes from the US today as the foreclosured homes crisis spreads from homeowners to tenants too. They might not have a mortgage to pay, but their landlords sure do. So if they can’t pay, you can take your perfect credit rating and on-time rent payments and shove ‘em where the sun don’t shine - your backpack perhaps.
Landlords aren’t obliged
This isn’t just an occasional occurrence either, boiserealestateinfo.net says 40 percent of single family home foreclosures in LA currently involve rented or leased property, and that figure is on the up. Apparently landlords aren’t obliged to let tenants know when the house enters foreclosure, so it’s a lovely surprise for them when they find themselves out on their ear.
And if that’s not doom and gloom enough, the rental shortage in the US means that it’s hard to get back into the same standard of rented property for the same price. From mansion to maisonette it seems.
Tenants - pay the rent and make sure it covers the mortgage
Luckily it doesn’t seem to have spread to the UK yet, although we are well known for following America very closely, so renters keep an eye out - no, not for George Bush - but for signs of the same crisis hitting the UK. My advice? Check if your rent covers the cost of the landlords mortgage, otherwise that great deal you got will bite you, and bite you hard.
This is really a statement of the bleedin obvious. In some ways - it’s so obvious that it gets forgotten. In many cases rents have been squeezed so hard that rentals don’t cover mortgage payments. This is a situation that most, with the exception of the super wealthy, will find hard to live with.
Tenants: You may have got a super deal that your landlord has accepted in desperation, believeing it’s better to have something rather than nothing.
My experience is ‘if it doesn’t balance, it doesn’t balance and something rather than nothing puts you on the skids’.
Comment by stuart — June 30, 2008 @ 11:17 am