How we could have avoided all the hassle

We could have avoided most of the problems if we had had insurance coverage for unpaid rents, but we didn’t think it was worth the extra cost. Now, believe me, we are not making the same mistake again! Also, we chose the guy ourselves (to try to save money! And it cost us more in the end…) and maybe we just should have left it to professionals, which is what we are going to do from now on, although, again, it means extra expenses for us, but more importantly for the renter (the law in France states that agencies commissions for renting purposes must be split 50/50 between the landlord and the renter).

I am disappointed by the guy’s behavior because he kind of had the profile that landlords are suspicious of, as I explained before, but we were willing to rent him our flat and were thinking that he would prove people wrong and show that foreigners that have just arrived in a country (his French was excellent though) and just started a job are as reliable as any other person. I am a foreigner in almost every country I live in and I am an entrepreneur so no steady income either (meaning no salary really…) and yet I am glad that people did rent out to me and trusted Fred and I enough to give us two loans to buy our properties. I guess that the biggest difference is that WE are honest and these brothers were not. Based on this experience though, I would say that another way to avoid problems is to go for safe renters and not play the good Samaritans.

Despite all the negative experiences I am presenting now, I must say that we were lucky that the renter left the place willingly because otherwise and although he wasn’t paying, expulsing him wouldn’t have been easy nor cheap, especially with French laws that are designed to protect the renter (I guess law-makers think all landlords fit the description above).

Here are examples of provisions that protect the renter in France, to the detriment of the landlord:

• it’s forbidden to ask for a safety deposit of more than 1 month of rent (which is obviously insufficient when you rent out a furnished flat);
• it’s forbidden to ask certain types of documentation that prove the financial situation of the renter or the warrantor;
• no expulsion is possible from November to March because it’s winter;
• it’s forbidden and punished by law to change the locks when your renter is not paying you and yet stays in the flat during months or years.

So another piece of advice: check the laws governing renter-landlord relationship and either don’t invest in countries that are too protective of renters or, if you don’t have the choice, do a lot of research to buy the most suitable insurance coverage (at least unpaid rents, deteriorations by the renter and legal protection in case legal action is necessary) and, depending on your situation, look for the best management company in your town although it means extra cost.

Another idea Fred and I had was to create an entity and rent out the flats in the name of this entity. On the one hand, it enables you to take some distance when problems arise because you are not involved personally, the entity is. On the other hand, a dishonest renter might think it twice before he/she messes up with an entity because they don’t know how big it is and it’s probably more imposing that private persons.

We will let you know how things are going. We have already found a management company that seems to meet our needs (let’s hope it was not a facade to gain a new client!), they provide quite good insurance coverage and we will pay them to find the renter for us so it might be the last time we have to personally deal with such a problem.