Category Archives: Landlords – need to be careful

Landlords need to be careful . . .

If it sounds too good to be true

If you are a landlord and have been approached by a company who have offered to either:
• Take your property and give you a higher rental income than you would normally expect.
• Manage your property for a fee, but greatly reduce both management costs and voids, meaning you end up with a higher return on your investment
• Any variation on these themes – where you suddenly find you are getting more money than you might normally expect.


There are some very good companies out there who will work with landlords through all sorts of arrangements to maximize income on a property, equally there are some who are not so good and we often see things go wrong when landlords work with the latter.

Someone might want to show you that they have been able to achieve far higher rent returns than normal in a different local authority area and therefore they can achieve the same result for you. But that might be because they have been able to make specific arrangements with the Housing Benefit department or a particular council-run statutory service in that area. You absolutely cannot assume that a different local authority will allow the same arrangements. Even within a local authority boundary, you can’t assume a council will automatically agree to help fund higher rents (either through Housing Benefit or other funds) for one unit of housing because it has already so for a different unit run by that company.

We have seen plenty of examples where landlords have been badly caught out and ended up with net losses because they have not understood this point.

You also need to be careful when someone wants your property to house vulnerable tenants who need extra support. As a council – we are very appreciative of some of the excellent landlords and companies who give accommodation to those with particular needs or challenging behaviour. Everybody needs and deserves a home and there is no reason at all why a commercial organisation or landlord can’t specialise in providing accommodation to people with significant social problems. Any landlord helping vulnerable people and doing things properly will get our full support.

But some organisations will rent your property from you and then effectively just dump vulnerable people there without proper care or supervision. You might think that’s not your problem. Your rental income is coming from the company, not their client and you are not responsible for the management of the property. But it’s not always that simple. There can be all kinds of things you might still have legal responsibility for, depending on the exact nature of the agreement that’s in place; anything from anti-social behaviour to waste problems or fire safety. You could end up with massive bills, legal issues and reputational damage.

The other problem is that some of smaller companies operating on the fringes of the sector are rather ‘fly-by-night’ and poorly run. Sometimes going out of business, leaving huge unpaid bills behind them and owing you the landlord months of rent – something we have certainly seen happen in Sandwell.

So, I will reiterate that yes – we do have reputable property companies working in our area who provide genuine value for money to property owners through different management or sub-letting arrangements. But if someone is offering you a higher than normal return on your money – please check them out very carefully. We see the damage when landlords don’t do this. Just remember, if it sounds too good to be true . . . then it’s not true.


Liz Mooney