OpenRent Community

Difficulty renting when self employed

I am self employed and am looking to rent my first property but can not provide payslips as i am self employed. I ask a few questions get a instant response but when I ask if I can pay 6 months up front I get no response back. I read that offering to pay 6 months up front is a solution if you are self employed and have no guarantor then I read others warning landlord not to rent to people who offer to pay 6 months up front because they are proble growing cannabis. What am respond to do? The landlord could atleast respond to me if he has concern I mite be dodgy in some way.

I had a tenant in the same situation. So I requested his parent was a guarantor who we also credit checked so I was happy with that. He’s a dream tenant who has made the property look even better and seems to fix any issues without asking us to do it (which of course we didn’t expect - but it’s a nice bonus!)

I was self employed before becoming a Limited Company so I completely understand how hard it is, but please understand that it is considered a higher risk for landlords who may have put their life savings into having just the one property - so they need to play it safe (also other factors come in to play as I imaging no proof of income could result in voiding rent guarantee insurance for example).

Perhaps if you can offer a guarantor to landlords you may have more luck?

Good luck finding a home. I genuinely can understand your frustrations.

I underatand a landlord could have some concerns about none payment but I do not see how that would apply to me when I paying 6 months up front ? I would even pay a year up front if the property is as advertised and is quiet with no nuisance neibour blasting music or other annoying thing that impact my work.

Many of us landlords have been trained to run a mile when 6 months rent is offered upfront. We hear situations where they move lots of friends in or start cannabis farms. Rare, but it does happen. The biggest issue is that when rent is paid up front, I believe it is harder to get them out. Where you could evict a troublesome tenant in a few months - if they paid 6 months up front it’s a much harder/longer process to evict them. Lots of legal fees too! That’s why it’s not attractive to offer 6 months upfront to a landlord.

Also, often tenants have got used to not paying any rent for those 6 months so when it’s time to start paying it doesn’t happen. Of course most people would not do this, but for some reason these kind if risks are hugely increased in this situation.

Offering a guarantor is the only thing I can suggest in your situation. But there will be much more experienced landlords than me on here who may be able to offer better advice.

Good luck with it.

I appreciate the responses. I do not have a guarantor. I will be filling my tax return in for the year 2017/2018 soon once that done can I not show earning then ? Was hoping to move out soon but I guess that not possible now.

Oh wait even if i show my earning would I still need a guarantor either way meaning i can never rent lol

Hi Simon your not the only one having problems renting, my daughter works but doesnt earn enough to pay the full rent so she has to have HB (housing benefit ) the amount of HB from council is guaranteed +she makes up the rest. She was happy to pay 3 mths rent upfront + deposit as she thought it would help the Landlord , also it takes 4/6 wks for HB to set up , so she was secure in the knowledge the Landlord would have rent in advance all the time. She also had guarantors ,& a lovely reference from a previous Landlord, plus work references if needed. She was told she was accepted & asked what date she wanted to move in which she said, that date passed & the next we saw in openrent was the property had been let, Very unprofessional behaviour from landlord. So I would love to ask , Is their any landlords out there who will accept HB & gain themselves a damn good tenant. My daughter has everything a Landlord would need but they still dont want her. All I can say Simon is good luck to you, wish you all the best

The fact all was agreed and your daughter had everything they asked for and they then let it to someone else is a joke. The thing that annoying me is if you Google “how to rent without a guarantor” every site says offer 6 months up front damn even this site does it but when I offer 6 months up front I am told I must go through the open rent checks for suitability meaning to see if I can afford the rent what I can easily and that shown by the fact i am offering to pay 6 months up front. The worries about I could be a cannabis grower is dumb when I am registered as self employed and soon will be paying tax or do all cannabis farm pay tax lol. I also find the “you mite move a lot of people in” kinda weird also as like I said I can prove I am self employed I can even show you what I make a month and last I checked would the only people who do that kind of thing be eastern European who work at Amazon or something. The “you mite not move out” I am again paying 6 months up front so what I am all of a sudden going run out of money, Iook again at my monthly earnings. Why no system in place that let me put 6 month or even a year rent into an account and open rent then give those landlord the monthly rent every month. I so far have 1 person who willing to speak over the phone but his £75 a month more expensive and further away so I guess I have no choice but to message a few more landlord and if they decide to take the stance of everyone a potentail cannabis farmer then I guess I will have to go with the more expensive option.

I would say what the chances of someone who can show they are self employed, show monthly earning and that person sending you 6 months from their bank account would mean they ain’t going to be a cannabis farmer or move in a large group of people to work at Amazon or refuse to move out after 6 months when that person show monthly earning that can cover 6 months rent.

Being turned down has a tenant is never nice, but in the majority of the cases it isn’t personal, it just feels that way. Unfortunately it’s all to do with risk assessment. The majority of landlords only have one or two properties and these take a much greater risk than a landlord with a large portfolio. If your a landlord with a mortgage on a single property and the tenant either can’t or wont pay your in danger on losing the house. Bad tenants are in the minority, it’s just small scale landlords can’t take the chance of getting one.

Mike.

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It not really landlord with a few properties. The first guy I asked if he would accept me paying 6 months up front as I have no guarantor told me he has 100+ properties. He has had that same property up for over a month as I have been looking at this site for the past month and decided to start trying to rent this week and his had the property up for £450, £375 and now it at £350 meaning his not making any money on that property. I think the fear of a tenant not paying mean all landlord can now not be flexible because come on I am offering 6 months up front so what the risk of him losing money ? In the radius of the search I do what is 150km from my postcode I see say 2 property a week getting rented and most decrease constantly trying to get a let showing they are losing more money not even bothering to listen to potential tenants who can easily cover years of rent.

Hi Simon, I have let a property to someone who had capital but no earnings. I took 12 months up front. I did this after meeting the tenant doing thorough credit/identity checks, and being provided with 6 months bank statements. I would take on a self employed person. But only after I had met them, done checks as above, and done some investigations online. I realise this is really intrusive and I do find it awkward, but because of the dodgy minority, everyone else has to be rigorously checked. The scariest part for me is coming to the end of the 12 months when I didn’t know if I was going to get even 1 more month, let alone 12. Had my judgement and trust been wrong? Luckily my judgement had been right and that tenant paid another year upfront. The tenant was a good tenamt and left the house in a reasonable condition. But it was/is a risk for a landlord! Evicting tenants is a long and expensive process, that many of us small landlords just cannot afford. I know… I’ve had to do it. I do hope you find someone who will give you a chance. Good luck.
Teresa

I ain’t really got time to fully look into this but why is it more risky if someone pays 12 months up front instead of 1 month? You just received double occupancy time than what most landlord want out of a tenant. Would you not have more risk of tenant refusing to pay after a month on the monthly setup ?

I also find this whole guarantor thing interesting so the whole idea of a guarantor is if a tenant refuses to pay you go after the guarantor what if the guarantor refuses to pay ?

I would show a month income and the amount in my account on my phone banking app but no way I am giving someone 6 months of my bank statement.

Because if the property is mistreated notice is difficult to serve when a 12 month tenancy has been agreed.

The guarantor is often someone who owns a house and/or mortgage so they cannot go AWOL hence are easily locate to make payment (that’s what I ensure anyway). So if the tenant didn’t make payment then the guarantor is traceable, unlike tenants who can go live wherever they like and be harder to find.

I’d like to just jump in here with a few things which might shed some light for both landlords and tenants.

Referencing
Tenant Referencing in general is pretty inflexible, with several known flaws, some of which @Simon29 has pointed out. It isn’t great for self-employed people. It isn’t great for people claiming benefits…

Many landlords know this, and we at OpenRent also actively try and explain these flaws, and advise landlords to see referencing as one tool among many in helping them meet the right tenants.

The reason, though, that most landlords want a tenant (or guarantor) who will pass, is that it means the tenants will probably have enough money to pay the rent (whether they do end up paying the rent or not is almost besides the point). It also means that the landlord will easily be able to get a cheap Rent Guarantee Insurance policy that will pay out if the tenant stops paying rent.

As a few people have mentioned, most landlords own one property, so they can’t afford to have a tenant who doesn’t pay the rent. Because they will only have one tenant, they want to hold out for the ‘perfect tenant’.

But the conception of the ‘perfect tenant’ harms everyone else (i.e. 90% of people) who doesn’t fit that description. Just like how all workers feel like they have to pretend to meet the ‘Ideal Worker’ norm in order to find work and have a good career, tenants have to pretend to be the ‘Ideal Tenant’ in order to find a home, and the unfortunate result is that people like Simon, who have enough by far to comfortably rent a property find it hard to find a home.

Rent in Advance
We facilitate the creation of thousands of tenancies every month, and we can tell you from experience that many landlords are happy to take rent up front, so Simon, please don’t give up hope on this! As you say, in many areas in the UK, the markets are slow, and tenants have considerably more bargaining power than in, e.g., London.

Cannabis Farming
The idea that anyone who offers rent in advance is going to be growing cannabis is false and damaging. Does it happen? Sure. But as @Russell_Jones_Proper says, landlords have been conditioned in to being scared of this option because it’s a good headline for papers. It’s a classic case of Mean World Syndrome!

Great point Sam makes there; if it wasn’t for the media stories, the world would be a less scary place! We always hear the stories about the 0.1% bad (but never the 99.9% good!)

Hi Simon,
I would say just keep looking I only have one property and if you came across as genuine I would rent to you, same with Dss it all comes down to communication between landlord and prospective tenants.

Simon I have accepted 6 months up front. I can do that to others as I have been self employed for 50 years . My first and only landlady gave me a break. However if you are newly self emp you have no track record of earnings. , and if you are young as well and male High risk!! 30 years a landlord. Get parents to be guarrantor as well