In the UK there are an estimated 1.5 million landlords currently in operation. This number continues to grow annually and will continue to do so.
While there are a number of ways to go about renting out your property, one way you may not have heard of, which is both time saving and profitable, is guaranteed rent.
What is guaranteed rent?
Also known as rent to rent, this is where an individual company takes an interest in a landlord’s property over a period of time. During this period of time, the company guarantees to pay a fixed amount of rent to the landlord.
When this happens, the company then becomes the ‘renter’ and before the property can be rented to any tenants’, permission is required from the landlord. Once this happens, the renter and the tenant become liable for paid rent.
Why choose it?
Those who own properties and are looking to rent them out, often choose this as it comes with a number of benefits to the owner of the property. For example, when it comes to the rental income, the landlord is guaranteed rent each month regardless of whether the tenants pay or if the property becomes vacant, due to the arrangement made between them and the renters.
Alongside this, if the property becomes damaged in any way, the renter will typically take care of this. This is due to them having a responsibility to return the property back to the landlord in the condition it was when they took it from the landlord.
Further to this, it works out well for the landlord in other financial circumstances too. As you know, letting, management and renewal fees can often be expensive, but, when it comes to guaranteed rent, you won’t incur these fees. This is due to the renter complying with several laws that require them to save the landlord both time and money. Meanwhile, the length of the contract can be determined by the landlord, with requests ranging between one and five years in order to help you budget long-term.
Guaranteed rent insurance
If you do opt for guaranteed rent, one thing you should ensure you have as a landlord is guaranteed rent insurance.
Available from places such as Homelet, this acts as a safeguard should the tenant be unable to pay rent, ensuring you still receive your rental income should anything bad happen. This is something that should be looked into as soon as you make the decision to go down the guaranteed rent track, as 67% of landlords have experienced the issue of non-payment.
If you’re the renter in question, you’ll probably want to know what’s in it for you. Luckily, there are a number of benefits for the renter as well as the landlord.
As you are taking on the lease of the property, you technically become the landlord where the tenant is involved. This gives you the chance to find the tenants and keep the rent that they pay and generally allows for more flexible arrangements to be made. An example of this could see you renting out multiple rooms to accommodate a number of tenants who then share facilities.
So, if you’re looking to rent out a property you own, or you want to move into the rental market, guaranteed rent is something you may want to look into.