Research by London agency Benham and Reeves says the cumulative cost of a landlord suffering a bad tenant and then evicting them could - in extreme - cost no less than £100,000.
Previous research by the agency highlighted the increasing number of fraudulent lettings applications by rogue tenants, who no longer need pay if their application is denied due to the introduction of the Tenant Fee Act 2019.
Now it has calculated the detrimental financial impact a rogue tenant can have on a landlord's buy to let investment based on lost rent, the cost of refitting a kitchen and bathroom, redecorating and replacing the windows, the potential legal fees, as well as the additional cost of mortgage payments out of their own pocket while no rent is coming in.
The situation is theoretical but is not impossible, and many landlords have suffered precisely such a ‘perfect storm’.
According to Benham and Reeves, a rogue tenant takes roughly nine months in total to evict from the moment they enter the property to legally removing them. On average across the UK, that’s £6,111 of rent lost.
If the tenant is particularly bad and the property requires a complete renovation, this could cost £8,000 for a new kitchen, £4,875 for a new bathroom, an additional £2,900 for redecorating, plus £7,000 for new windows.
Average legal fees of £3,000 would be required during the eviction process, added to which there could be nine months of mortgage payments (£8,412) if there is no rental income.
This total - already over £40,000 - would in London rise to a likely £58,000 because of higher average costs; exceptionally, in the most expensive boroughs, the total bill for these problems combined could exceed £100,000.
“We’re not kidding when we talk about the complete renovation and refurbishment of the property afterwards either, as [rogue tenants] will take every single thing they can and destroy whatever is left. Kitchens, bathrooms, and windows are often the main features targeted as they know that these are the most costly areas of a property to replace and more often than not they will smash appliances to pieces, disconnect pipping and shatter windows for no other reason than to cause the maximum amount of damage they can” says the director of Benham and Reeves, Marc von Grundherr.
“We can’t stress enough how vital it is to rent via an agent who conducts proper checks through a qualified third party trained to spot even the most convincing of forged documents. Failing to do so can cost you thousands, even hundreds of thousands to put right.”