It is no secret that the divorce rate amongst married couples is extremely high.
In between the flurry of emotions, the question that is left hanging in the air is: what happens to the property when the divorce is finalized?
An even bigger risk is pointed to those that are living together but not yet married. In major urban areas, it has been estimated that about 25% of lease agreements are being signed by unmarried couples who may have no intention of getting married.
A break up not only influences the couple in this case but also the real estate agent which is why landlords and agents are taking action:
Couples may agree to live on the same property, purely for the convenience factor, but most are already in intimate relationships, which at the time of the lease signing, they appear to be committed to.
However, it does happen that the lease agreement lasts longer than their relationship and the couple decides to split up.
These splits are often traumatic and heartbreaking, and most of the time one of the pair packs up and leave. This is an emotional time for both of the couple, but it also leaves a lot of unfinished business behind which can cause a real headache for the landlord.
It is a common case that the remaining tenant cannot afford the rent on their own or they just fall short on the remaining amount. This leaves landlords in a tough situation and it is surprising just how frequently landlords find themselves in this position
The landlord and agent will then find themselves in a position where they are being paid less than they agreed upon rental amount as stipulated in the contract.
This usually happens for a few months which can, of course, deal a huge blow to the landlord’s finances. They are usually dependent on rental income in order to pay off the bond of their house.
When signing rental agreements, some agents insist that only one person signs the agreement and takes on full responsibility for the rental payment and the maintenance of the unit, especially if it is a young couple.
This precaution, however, is by no means foolproof because it might mean that the signatory is unable to meet the monthly obligations.
What’s in a name?
Another precaution that rental agents make when it comes to younger couples is to insist that a parent signs the lease agreement or that the parent signs an agreement stating that they will be held responsible for any shortfall of rent.
Young people who decide to rent are difficult to screen because of their age. Usual credit employment checks are often unsuccessful because most couples are still students and many have not been employed for long periods at a time. Very few of them hold credit accounts in their names. This can complicate the process of validating their credit-worthiness.
Despite these difficulties, leasing to young couples is still a profitable investment. There are always young couples that are not financially stable to purchase a house yet and many are students seeking accommodation in the major urban hubs. This is a very attractive option for buy-to-let investors.
No matter who you decide to let to, it is always advisable to seek the help of a reputable real estate agent that has adequate knowledge of any legalities that might arise.
Clear and open communication with your young tenants is also important if you want to get the most out of your rental unit each month.