So many letting agents offer guaranteed rent or rent guaranteed schemes. Like everything in life the devil is in the detail. If it sounds too good to be true it most likely is.
If the agent is providing the guarantee and not backing it with an underwriter you should check the financial stability of the agent. If they have a weak balance sheet or they are new or weak sole trader it is likely they will not have the cash resources to meet their obligations and guess who gets left out of pocket? The Landlord!
Guaranteed rent would infer that you are guaranteed to receive the rent regardless of what the tenant does.
Rent guarantee suggests the agent will provide you with rental payments subject to terms.
Over the years I have seen many schemes. Some look and sound fantastic and cost next to nothing in comparison to what you think they cover. Take care to look in detail at the small print. In the past 4 weeks alone I have seen letting agents with schemes:
- offering up to a maximum of 3 months rent if the tenant fails to pay
- only offering to pay rent the tenant doesn’t during the fixed term of tenancy
Neither of these schemes provides a landlord with the correct level of rental insurance needed to deal with the full amount of lost rent during the repossession period (generally around 7 months in total from initial default). If you have to obtain vacant possession owing to the tenant failing to pay rent and the tenant is seeking affordable housing via the local council or housing association you will not be able to gain possession until a bailiff has been instructed. May seem mad but if you don’t agree and want to challenge that process I suggest become an MP; sell up or emigrate!
Belvoir Cambridge offers a professionally underwritten rent guarantee scheme with legal expense cover. This product covers all rent up to vacant possession plus 75% of the rental amount for 8 weeks after possession. It also handles the court action and costs involved obtaining possession.
For more information about our products call 01223 352225 and ask to speak to one of our qualified advisers.
Free Sale Advice and Buy to Let Advice
Terry Lucking is the owner and director of Belvoir Cambridge. Terry is proud to have worked in the private rented sector for close to 15 years with thousands of landlords and tenants.
Terry and his team would be pleased to receive calls or emails from landlords considering selling a property with a tenant in situ. They would also be pleased to receive calls from prospective investors.
Belvoir Cambridge are accredited and regulated letting agencies. They are members of ARLA, Safe agent, Propertymark and the Property Ombudsman. One of the requirements for membership of ARLA and Safe Agent is to have Client Money Protection and all client monies independently audited and accounted for annually.
For more information or to ask Terry a question call 01733 511099 or send an email to terry.lucking@belvoirlettings.com
