Profit through the challenge of silver renters
Property managers must deal with a wide range of tenants. Most beginner investors think their tenants will be in their 20s or early 30s, but this simply isn’t the case. Students aren’t typical renters today.
In fact, the so-called ‘silver-haired’ renter is the dominant force in the private rented sector. Less than four in ten tenants are under 35 years old, and less than one in five tenants over the age of 55 years want to own their home.
Dealing with the silver-haired renter brings its issues. Some of these may seem obvious, and others less so. Here we look at the key factors that we, as property managers, bear in mind when we lease your property to an elderly tenant.
Silver-haired renters tend to stay for longer
The silver-haired renter is reconciled with renting as a lifestyle option. Most have no desire to buy their home. Elderly tenants are more likely to remain in the same property for longer:
- They’re past the age of expanding their family
- Their jobs are stable
- They’re looking forward to retirement
Also, they pay their rent on time. Their maturity means they are more aware of reporting repair issues. In the long run, earlier reporting equals cheaper maintenance bills.
However, while the constant and steady stream of rental income is a distinct benefit to the property investor, there are also some downsides. For example, annually, pensions don’t tend to increase by much. So, your ability to raise rent is limited. You’ll need to weigh up the pros of uninterrupted income against how much tenancy voids cost the buy-to-let landlord.
Discrimination against the elderly
Investment property management is dictated by laws, rules and regulations. One of these is the Equality Act 2010. Property managers and buy-to-let landlords are prohibited from discriminating against a tenant based on their age.
We must take care when advertising your property (e.g. wording), and cannot say a property is no longer available if it still is. We cannot evict a tenant for any discriminatory reason, either. And we can’t impose extra conditions in the tenancy agreement which we wouldn’t ordinarily impose on younger tenants.
Discrimination against disability
Older people are more likely to have a disability, physical or mental. It would be foolish to let a tenth-floor apartment in a block with no lift to a person who cannot climb stairs. It wouldn’t be classed as discrimination. However, where a tenant is already residing on your property, you may have to make allowance for disability. For example, you may have to install:
- Grip rails in the bathroom
- Provide handicapped parking spaces
If you don’t normally allow pets, you must allow a blind tenant to have a guide dog.
Older tenants are more likely to hoard
Hoarding cold is a valid reason for eviction if it prevents property managers from carrying out their responsibilities. Problems for landlords include the following:
- If access to the property is restricted for gas inspections. It could lead to a breach of the Gas Safety (Installation and Use) Regulations 1998.
- Hoarding typically restricts or prohibits access to the bathroom, kitchen and bedroom. The tenant becomes unable to wash, clean and cook.
- At the end of the tenancy, it could be expensive to make the property good for re-letting. If the tenant dies or leaves, there will be more costs (clearance and cleaning). These could be difficult to recover.
Hoarding equals trouble.
Your instinct will be to evict. The grounds for doing so are made by reference to the Anti-Social Behaviour, Crime and Policing Act 2014. This law introduces the concept of ‘housing-related nuisance’. Hoarding that interferes with the needs of a property manager – such as prevention of access for gas inspections – is considered as anti-social behaviour, and grounds for eviction.
However, hoarding may be the result of a mental illness, such as Diogenes syndrome (elderly self-neglect), dementia, schizophrenia, or OCD. It brings us back to discriminating against disability. It’s a rocky path and one which is littered with injunctions before eviction and possession can take place.
How we help buy-to-let investors with elderly tenants
We don’t want to evict good tenants. So, we have some policies in place to help elderly tenants and landlords. These include:
- We’ll look at the help that can be provided in the local community. Organisations like Help the Aged will be able to advise the tenant on help with their day-to-day activities. The local authority may be able to provide payments or benefits to help where needed.
- We don’t let tenants fall behind with rent payments. Doing so is not only bad for the buy-to-let property investor, but also for the tenant. Should they need to be rehoused, a bad rent record will count against them.
- If an elderly tenant is a constant late-payer, we’ll attempt to discover why. Often, it’s simply a matter of realigning their rent due date with their pension pay date.
We’ll also watch for signs of hoarding during routine inspections. Especially, we’ll be on the lookout for:
- Signs of hoarding that attracts rodents and other pests
- Hoarding that prevents access to the property, or emergency exit(s)
- Pets when the tenancy agreement stipulates no pets
- Unsafe storage of hazardous materials
We document all our findings during an inspection and include photographs and videos. If there are safety or hygiene issues, it may be that together the investor and property manager need to contact the local authority or a family member.
Older tenants can be great news for buy-to-let investors. A steady income stream, longer tenancies, and fewer void periods. However, just like other tenants, they must be managed. Doing so appropriately takes an understanding of likely needs and issues as well as thorough knowledge of the law, rules and regulations.
As with any tenancy, the objective of the property manager must be to maintain landlord profitability and good tenant relationships.
Contact Ezytrac today on +44 1522 503 717, and discover how our investment property management service could help you benefit from the dominance of the silver renter in the private rented sector.