Immigrant Tenants

This story, published by the FT shows the benefits of letting to tenants who have arrived from the recent accession countries to the EU.

Published: January 6 2007 02:00 | Last updated: January 6 2007 02:00

Davina Tanner (above) has built up a portfolio of around 75 properties in East Anglia that she lets to immigrants. She now operates these professionally and has also set up a lettings agency to run properties on behalf of other landlords.

About 95 per cent of her properties are rented to migrant workers predominantly from Poland, Hungary, Lithuania, Estonia and Latvia, who come to the area to work on the nearby farmland. Tanner says business has picked up over the last four years but a bigger change has been the mindset of her tenants.

"Migrants are often now looking to settle more long-term and are becoming more discerning. They have higher expectations of what kind of properties they want to live in," she says.

Tanner seeks out rundown buildings that she can easily upgrade into respectable bedsits or flats. She typically charges £70-£90 per week.

She targets the immigrant population by advertising in eastern European languages in local shops and her agency. Tanner says migrant workers tend not to have much loyalty to their landlord - in that they might up and leave without any notice - but they are usually reliable with the rent.

Another incentive is the yield, which she says is typically 10 per cent. This is significantly higher than an average UK rental yield of 4-5 per cent, which Tanner believes is due to very high occupancy levels, and also because she looks for bargain properties.

She typically borrows between 70 and 85 per cent of the property value, and uses mortgage funding that takes into account any rise in value gained from the refurbishments she makes.

Copyright The Financial Times Limited 2007

Original story.

Opportunities for converting suitable properties in Hertfordshire are few, but the approach is very sound.