Guarantee Rent Schemes or Rent Guarantee Insurance can play a huge role in how you rent out your property.
If you are new to letting a property and unless you’ve got a good understanding of buy-to-let, it can be somewhat daunting to cut through the jargon to determine what’s best for you when becoming a landlord.
In simple terms, all of these rent guarantee products are designed to guarantee the landlord’s rent in situations where either the tenant encounters financial hardship and can’t afford to pay the rent, or in cases where they refuse to pay rent for whatever reason such as disputes.
With numerous guaranteed rent schemes on the market, each with their own terms and conditions, eligibility and restrictions, it can seem difficult to decide on which one’s best.
So at Rent My Home Today we’ve put together this article to demonstrate to you how a Guaranteed Rent Scheme brings more benefits and less hassle than a Guaranteed Rent Insurance Policy...
Rent Guarantee Insurance is basically an insurance product that you can purchase from a specialist landlord insurance broker.
Essentially it’s the equivalent of a ‘life insurance policy’ or ‘building and contents’ insurance. Being an insurance backed product, it comes with terms and conditions which may vary according to the insurer but generally include:
This really is the key distinguishing factor of a Rent Guarantee Insurance product – the time it takes for the landlord to receive the rent which is on average is up to 8 weeks.
Chasing the tenant for late rent is one thing and having to explain to a bank that you cannot afford the mortgage as the tenant hasn’t paid is a whole other scenario.
As Mr Singh, one of our gold landlords, recently discovered, if you have arranged rent guarantee insurance, there is still that worry of will the insurance policy actually give me peace of mind if a claim is needed?
In the opinion of our experts here at Rent My Home Today, we wouldn't really recommend an insurance policy like this in terms of ‘protection’ when letting a property, especially if the property was mortgaged.
With a fully managed Guaranteed Rent Scheme there are no worries about additional solicitor fees or any of the above points.
A guaranteed rent scheme is not a policy, it is an assured management system which as a landlord brings less hassle, less worry and confidence in the quality of tenants - because at Rent Your Home Today, we are your tenants!
Guaranteed rent shares some of the benefits of a rent guarantee insurance however, in the case of our Guaranteed rent for 3-5 years scheme, we guarantee your rent so you will know exactly when you can expect to receive your first to your last payment. The exact same rent will arrive in your bank account each month for the duration of the lease. Essentially, there is no more stress of waiting up to 8 weeks for your rent to be paid.
The industry refers to this type of product as a guaranteed rent scheme and there are some high street agents that offer this type of service, however with Rent My Home Today your rent is paid to you in full month on month, no questions.
Plus in terms of a guaranteed rent scheme, only with Rent My Home Today, you as a landlord would benefit from all of the following:
We recently compiled a survey highlighting the costs of tenant eviction and through our research we found that between January to March this year, 35,188 possession claims were registered by landlords in England and Wales and a staggering 25% of these possession claims were escalated to a repossession being carried out by a county court bailiff. That’s on average a hundred rented homes visited by a court bailiff per day and being forced to leave.
According to the Ministry of Justice, it now takes on average 41 weeks from submitting a claim to taking possession of the property. In worst cases scenarios across the UK, the costs of loss of rent and legal fees can be in excess of £10,000.
That figure could then rise to £16,000 as well as the emotional stress for those landlords letting property in London.
Managing your own rental property or portfolio can be time consuming, stressful and financially risky, especially if you don’t live near your properties. But it doesn’t need to be.
Imagine life without the hassle of trying to find new tenants; chasing late rent payments; finding a reliable plumber to fix the boiler when it packs up. Now imagine receiving a guaranteed rental income and your property portfolio being managed by reliable an reliable, trustworthy company.
If that sounds appealing have a look at what we offer and try to think of a good reason why you shouldn’t use us.
If you would like to discuss our guaranteed rent package or you would like to find out more about our scheme, one of the landlord team will be happy to help...