Going for BTL

newDude

I'm going to get some BTL properties (5), and some people have tried to put me off by saying, "what if you don't find tenants, what if there are VOIDS, what if there are arrears" blah blah blah. Well i think i've found the answer Guaranteed Rent 52 Weeks of the Year! http://www.northwooduk.com/landlords/guaranteed-rent.html
I've got nothing to do with these people, but would like to know if anyone has used them and if they are kosher?

Aberdeenangarse

newDude wrote: »

I'm going to get some BTL properties (5), and some people have tried to put me off by saying, "what if you don't find tenants, what if there are VOIDS, what if there are arrears" blah blah blah. Well i think i've found the answer Guaranteed Rent 52 Weeks of the Year! http://www.northwooduk.com/landlords/guaranteed-rent.html
I've got nothing to do with these people, but would like to know if anyone has used them and if they are kosher?

It's guaranteed only once it's let. Now here's the catch, the cost of the Guarantee will be a sizeable chunk of the rent. Still think it's a good idea?

Werdnal

I agree - no agent in their right minds would offer this if there wasn't something in it for them. Higher commission definately.

If you take out the cost they are charging to offer this, versus the average annual void (2 months max), you'll probably find you are not much better off.

There may also be hidden clauses, like you sign up for a minimum 5 years contract with them, so you are tied in and cannot leave their services without a generous financial settlement to end the deal.

jimjames

There is no such thing as a free lunch.

You'll be paying for the guarantee even if you have perfect tenants. If you then stop paying because it has all gone smoothly you'll end up with tenants from hell.

Jumping in with 5 properties seems a little odd though? It certainly helps the void periods if you have more than one property and the income from one can be offset against another but is there a reason why you want to get 5 straight off?

Aberdeenangarse

I see in the last two months the blokes wanted to invest in Cable and Wireless, Oil, and the last couple of days Gold bars. I wonder if he'd be interested in parting with his cash for some magic beans?

Werdnal

jimjames wrote: »

There is no such thing as a free lunch.

You'll be paying for the guarantee even if you have perfect tenants. If you then stop paying because it has all gone smoothly you'll end up with tenants from hell.

Jumping in with 5 properties seems a little odd though? It certainly helps the void periods if you have more than one property and the income from one can be offset against another but is there a reason why you want to get 5 straight off?

I think OP's BTL plan started here:

https://forums.moneysavingexpert.com/discussion/3423053=

Aberdeenangarse

Werdnal wrote: »

I think OP's BTL plan started here:

https://forums.moneysavingexpert.com/discussion/3423053=

i don't have any income (incompacity benefit) so i might have to stop claiming this with this windfall before they find out in a few weeks and take me to court

:rotfl::rotfl::rotfl:

poppysarah

One company who does this will guarantee the rent but not the quality of tenant.
They will get you lha tenants and ensure you get the minimum rent.

They might well be getting much more rent than they pass on to you - but they have guaranteed the minimum so will give you that)
This might mean overcrowding the house to ensure it's got enough kids to qualify for max lha too.

I'm not saying this company does it - but if you wanted to make money being a letting agent it would be pretty sweet to get a nice legal doc drawn up to convince suckers that they will make guaranteed rent money via you.

Beckyy

5?

I would start out with 1 and see how you go. I would be very, very careful of joining a company like that. If they turn out to be useless and you're left paying 5 houses worth of comission to them then you're going to be screwed.

My advice would be to buy 1 BTL house outright, and let it out either through a normal agent or privately. If that goes smoothly then invest in a second, purchased outright. if they both continue to go smoothly then you can take out a mortgage against one to buy a 3rd. It will mean that you're not left with mortgage payments that you might not be able to meet, because I can't imagine a mortgage lender being keen on giving somebody 5 BTL mortgages all at once.