Guaranteed Rent

Guaranteed Rent is a fixed agreed passive income you receive every month. The landlord leases the property to an individual or a company  who are specialised in letting your property in a way that is ethical and yields high returns for an agreed period of time. This is achieved by letting the property on a room by room basis.

Guaranteed Rent means the landlord receives income regardless of void periods. The company sub-lets the rooms to tenants who receive Assure Shorthold Tenancies. All maintenance, repairs, utility bills and any other running costs are being taken care off. At the end of the lease the landlord gets the property back in the same condition as before the start of the lease.

Pros

  • Maintenance and repair costs are fully covered by the Guaranteed Rent provider.
  • Utility suppliers are managed by the Guaranteed Rent provider.
  • The Guaranteed Rent provider has a stake in the running of the property, hence there are no unnecessary costs or lack of management as often experienced with some letting agents where the monthly fee is due regardless.
  • Live anywhere you want. Most communication takes place via email, text or phone, if there is the need at all.
  • Steady and predictable guaranteed monthly rental income (rent is paid even when the property stays empty).
  • This is a long-term solution that can last for as long as you want.
  • Mandatory planning permission is provided by the Guaranteed Rent provider.

Cons

  • Landlord has less control over management style.
  • Guaranteed Rent offer amount  is usually equivalent to the realistic current market on a single family let basis. This is frequently lower than if rented on a room-by-room basis.
  • Some properties need licensing.
  • Not every property type is suitable.
  • There has to be a level of trust and understanding that not every Landlord may be comfortable with. There are a lot of legal aspects that need to be taken into consideration. Communication is paramount which can take time to establish. Once all is set-up the relationship lasts for years and the benefits for both parties are rewarding. (read more under how we work)

Some exceptions will take place with regards to maintenance. Largely, this depends on the Guaranteed Rent provider and the terms that they provide. In our case we exclude any structural damage, boiler, heating, and sewerage systems. However, if damage is caused by the tenants, this will fall under our remit.

Who would benefit from this solution?

 

  • Landlords who would like to secure a predictable cash-flow over the long-term.
  • Landlords living abroad who have investment properties in London.
  • Landlords who are time poor or simply have no desire to deal with tenants and the associated administration of the running a property let.
  • Landlords seeking peace of mind knowing their property investment is looked after by a reliable partner who is genuinely interested in a win win scenario

Who this is not for?

 

  • Landlords who are looking to maximise their profits

Maximising profit is achieved by taking on the management of the property yourself. This includes an up to date knowledge of rules, regulations, and compliances that landlords are required to follow. The best place to start exploring what it requires to be and remain an effective landlord can be found here on the Residential Landlords Association website (http://www.rla.org.uk/) or the National Landlord Association (http://www.landlords.org.uk/) and your local Borough Council.

  • Landlords who don’t mind unstable profits, which can be high, low, and sometimes even negative.

Letting Agencies could be an option. Do keep in mind that the letting agent charges the agreed fee regardless of void periods. Your monthly profit is also going to be  affected by any extra works, void periods, and large bills not to mention ongoing utility bills, insurance, TV license, internet, and cleaning, among others.

 

 Considerations

 

  • Some Landlords prefer not to let to multiple unrelated people sharing their house – they would rather rent it to a family, hoping that this would result in less management and reduced costs. From our experience, we have found that this is not always the case, but more importantly managing your property by yourself may not be as efficient and cost effective as Guaranteed Rent provider do who has economy of scale and expertise to keep costs down.
  • When renting the house, some tenants sub let rooms without the knowledge of the landlord. This is illegal and can create a lot of legal problems.

Be aware that some Guaranteed Rent providers do not really offer FULL maintenance and repair cover and they will still charge you for a number of things. Always check terms and conditions on the lease agreement.