What's all the commotion about DSS tenants and DSS insurance? Why do some landlords dismiss unemployed tenants when they apply for rented accommodation?
That's what we're going to find out.
Government-backed tenants can be one of the best tenants you can have as a UK landlord and with this guide you can why.
But why do unemployed tenants have a bad name?
Let's see what's, what!
If you've been a landlord for a while, you've probably come across a few bad experiences in your letting business adventure. Bad tenants are few and far between because if you find them the right way, then you can eliminate the really bad ones like...
And so on...
Just to name a few... But not all tenants are like this and most people searching for new homes are people who need one desperately... People with families and commitment.
That's the people who you should be looking for, the people with morals, the people who really do appreciate the rent being paid for them until they find some sort of employment.
Of course, you'll come across a few bad eggs, but that's part of life. I think that people should be respected by landlords and not treated like a money tree, or as a way to keep some nice money flowing your way.
Look at renting properties as a - long-term, business thinking process - and you will find that your business takes on a personality of its own. Do you agree or do you disagree... Please make your comments below (at the end of this page).
Here are some common questions about DSS insurance and answers for landlords. Here we go...
This type of cover is for landlords with DSS tenants (the unemployed ones). It covers the contents of the property and the buildings for fire and other unforeseeable damages caused by acts of god or by malicious damage.
It can cover the landlord for liability and claims made against their letting business. Good landlords always have DSS insurance in place.
The meaning of "DSS" means (THE DEPARTMENT OF SOCIAL SECURITY). That's what the government calls it so the public knows how to find information about social security matters and where landlords can get information about benefit claims and what percentage of the rent is paid to that tenant.
That's what DSS means... Now...
Like buildings insurance, there is no DSS insurance, well it's not called that. Contents insurance can cover the tenant and the landlord for expensive items of interior decor like sofas, carpets, washing machines and if you have boiler cover, the policy will also cover emergency repairs too.
Tenants need their own cover to their own personal belongings.
Don't get me wrong, changes in benefits are a nightmare for landlords who accept DSS tenants, but that's just the government for you. It's not to annoy you, circumstances change from tenant to tenant and so does their eligibility.
I'm afraid you'll need to keep following these changes and make the tenant aware that any changes in their own circumstance must be reported to the DWP and you.
If they don't, that's where overpayments start to happen.
Cover you for liability with DSS insurance policy today! Click here.
Yes. It is advised by landlord insurers.
They are no such thing as "DSS buildings insurance", well the insurance companies don't call it that... They call it "buildings insurance". And because you have a DSS tenant, you may want to take a comprehensive policy out to cover things such as fire and theft, with a contents insurance policy in place as well (if you furnish the place yourself).
Next.. About the money and more on DSS insurance.
When the tenant received housing benefits, they either open a fresh bank account for the money to go into or ask the landlord for their account details so the money can be paid directly to the landlord.
You know the way you want that to go?
As a landlord, it would be up to you to sort this out between you and the tenant and remember the Department of Social Security has certain procedures in place just in case the tenant receives an overpayment demand.
Rates can change and they do so without your knowledge. It's best to keep up with changes in benefits and keep an eye on your monthly accounts.
And then there are overpayments...
The landlords would need to reimburse the government with any overpayments, (if the landlords receive the money directly). If the tenant receives the money in their bank account, (which is a bad idea if you ask me) the tenant would be held responsible for overpayment.
Either way, the government is wiser than the eldest owl and they do make mistakes. It catches up on either the landlord or the tenant, so if you notice any overpayment, sort it out before they do.
That's your best bet.
Next, we have...
That's a good question, and I could forward you to the quote form right now, but that would be cheating you as I want to provide value here. Go with a reputable landlord insurance company, a company that is trusted in the game. One who knows what they're doing with landlords.
Because a company who does more than one type of insurance is fine... But if you really want some real value, go with a specialised company who only does landlord insurance. Find an award winning insurance company and you'll be doing your business a favour (and the tenant who lives in your properties with a much better service).
Get a DSS insurance quote from top insurers in the UK, here.
Don't listen to all the garbage out there about tenant giving landlords a hard time because the letting business will never change - people will never change - so you're always going to get some sort of issues along the way.
Landlords shouldn't be scared of renting to DSS tenants, not at all... Because you need to think about your business in a long-term away. Finding decent tenants in the first place is the answer for landlords, but that's a can of worms in itself.
Embrace unemployed tenant whenever you can because the market share of unemployed tenants is around 52% (compared to 29% of working tenants) so that number cannot be ignored.
Next up... Landlord rejection...
Landlords with conditions hanging over them from the insurance and mortgage companies, tend to bend in their favour. That's the answer to that. If the landlord insurance providers say no to DSS... Then the landlord needs to listen because it's in the small print.
You can't avoid what financial institutes say, after all, they do spend a lot of money doing their own research on who are the best tenants.
Next up... The cost of insurance....
It can for buildings and contents insurance but not by much compared what you get out if it... A long-term lease with a nice family always pays for cover.
The best way to determine that would be to get a quote and see for yourself. Click here for that landlords.
Think about it as a separate part of your life, treat it like a business from 9 am to 5 pm, Monday to Friday. Only if you can that is... But if you can't and you have a large portfolio of properties, get someone else to handle some of the stress like dealing with tenants from day-to-day.
And the most important rule for landlords (in my opinion) is to find a half-decent tenant in the first place. Look for long-term (even if you buy a house next to their parents) and offer it to them for as long-lease.
Let them know that it's their own home (just like the council would). Or...
Outsource the work to estate agents... A better way.
Or buy a stress ball and play with that... Lol.
Remember, it's a business and there's always going to be some level of stress, so get used to it and think about it in a different manner.
Treat tenants like gold and have a keen eye for the good ones.
Now the best bits...
But before you do that you can get a quote for DSS insurance cover - here.
Problems always come up, no matter if it's a DSS tenant or someone who's working. If the property is in great order i.e... The boiler and the back and front door opens and shuts... And everything else is in order, you're doing fine.
You'll always get moaning tenants, the world is full of them and the best way to deal with them is to get the job done for them as fast as you can. Then, if something comes up after you have a good reputation and you can't do it right away... You have some leeway.
Or tell them straight... Give me time to get it done and stop moaning for god sake.
There are a lot of different types of benefits and as long as the tenant is claiming some sort of benefit... Housing benefit should be awarded to them. The tenant should be given the necessary paperwork to apply at the time they make a claim at the job centre.
The person who is receiving benefits will know better than you. It is their job to get approved and your job to make sure they are living somewhere safe and secure for their families.
The landlord needs an annual gas safety certificate no matter how big you are... From the local council to small one man bands... It's the law and if you don't do it... Hell, mend you!
Then there's the law...
You don't actually need landlord insurance by law, it's the mortgage companies who make landlords take a policy out if you operate a buy to let concern.
But for your own piece of mind and so you sleep like a baby... Get cover because it doesn't cost much (a few hundred pounds a year).
When a student receives a bursary, they can apply for housing benefit while they study. The amount they pay depends on the student's circumstance, they may have a part-time job (like most do) and that gets taken into account - when they apply.
All students can get help with the monthly rent if they are full or part-time at college or university, it's doesn't matter. The only thing that matters is their income and their dependants (i.e. Their children or partner).
Do you need DSS insurance at the right price? Find out more...
That's an easy one, but so it's much easier, here's a list of DWP websites, including Job Centre Plus and the DWP Twitter page so you can keep in touch with changes in benefit allowances and tenant guidance.
Next up... overpayments made to the landlord...
Pay it, and pay it as fast as you possibly can if you want to keep a good relationship and keep your bread and butter coming in. Remember the DWP are not animals or orcs behind a desk, they are normal people who can help you.
If you bump into an overpayment issue, get on the phone and be one step ahead. They'll notice that you are a good business person and offer you some leniency along the way.
Compare DSS insurance quotes for time-saving cover, here.
You could refer all your properties to an estate agency and let them check out the tenant's credit rating and so forth. Estate agents can take the hassle off your back for a fee, of course. Yes, money (around £50 to £100 per month, per property) but it can be worth every penny.
If you pay more than that, I would be asking if that's the going rate for that area?
Then you can enjoy the freedom and family life more or enjoy more holidays with the kids while you build up your portfolio of properties.