Guarenteed rent

captainawsome

Hi all, my first post on the house buying/renting board so hello. Me and my fianc! are soon to be moving house and have decided to rent out our old property. We have come across these guaranteed rent schemes, one in particular from a reputable estate agent with a local office and local knowledge. I had an appointment with a rep this morning and all seems well and good, possibly a little too good which has me suspicious. Apart from the agents monthly fee being hire than a management only scheme (obviously as its a 'better' package so to speak) are their any other downsides I can't see or havnt been told about? The rep was very professional and said 8/10 of their landlords are now on guarnteed rent, not sure if it was sales talk but it's understandable as they seem to offer a very good package. Any help or advise on this would be much appreciated, I just don't want to dive into something head first to discover the pit falls the hard way. Thanks. Craig.

DominicJ_2

A guarenteed low rent is a good deal with a good tenant, but then you wouldnt need the guarentee.
A guarenteed low rent with a bad tenant who trashes the house and disappears after three months, less so

motherofstudents

Don't know what they are charging you but landlord's insurance can offer this. I had a quote for £98 for the year. I'm not taking it up as I don't believe it is necessary in my circumstances but if it is your first time letting and you still have to pay the mortgage, maybe it's worth considering, just check the cost and try to figure out if it is worth it.

captainawsome

DominicJ wrote: »

A guarenteed low rent is a good deal with a good tenant, but then you wouldnt need the guarentee.
A guarenteed low rent with a bad tenant who trashes the house and disappears after three months, less so

This company vet the tenant thoroughly as its in their best interest to get the rent paid each month apparently. They also guarantee the interior condition as part of the scheme and if the tenant was do disappear they would have to find another one, we wouldn't be out of pocket. Infact everything you describe is why I wanted to use this scheme in the first place. Lol

captainawsome

motherofstudents wrote: »

Don't know what they are charging you but landlord's insurance can offer this. I had a quote for £98 for the year. I'm not taking it up as I don't believe it is necessary in my circumstances but if it is your first time letting and you still have to pay the mortgage, maybe it's worth considering, just check the cost and try to figure out if it is worth it.

Thanks I will look into this

G_M

As always there are pros/cons.

* regular income to cover your mortgage
* lower than market rent
* assurances about 'vetting' - take with pinchof salt. They will want any tenant in there rather than a void
* you lose complete control
* you need to check that the proposed tenant meets the requirements of your morgage/freeholder/insurer conditions: these may prohibit claimants for example
* you need to look carefully at response to damage: who is liable? Will there be a deposit?Is this guaranteed?
* what happens if eviction is needed? Will they evict? how? will they pay (legal/court fees)? or you?

Personally I preferto be in control of my own property, choosemyown tenants, but its a matterofchoice.

New Landlords (information for new or prospective landlords)

To what extent have you checked out the agency? If it does not work out, areyou locked in....

princeofpounds

They will bung an LHA tenant with questionable credit in there right away, I'm guessing. Not that all such people are bad tenants.

The problem is not so much if the tenant disappears, it's actually worse if they hang around not paying and trashing the place. I bet the agency won't be handling any eviction process if that's the case!

starbarboy

Hi there

Some good advice so far. At the end of the day it depends on how much you want to pay for the peace of mind. Also you may want to consider how it would affect you if you had a gap between tenants or if a tenant did not pay their rent. Alternatively though, you could consider paying the additional money that you would be paying the Letting Agent into a savings account should you ever need to use it. It may not cover the full cost but at least it would offer you some peace of mind.

Hope this helps

Stephen

theartfullodger

captainawsome wrote: »

This company vet the tenant thoroughly as its in their best interest to get the rent paid each month apparently. They also guarantee the interior condition as part of the scheme and if the tenant was do disappear they would have to find another one, we wouldn't be out of pocket. Infact everything you describe is why I wanted to use this scheme in the first place. Lol

Sadly there are many reports on Landlord sites of these wonderful "guarantees" turning out not wonderful.... in particular if you (property owner..) grant tenancy to agent/company who then get their own tenant on their own tenancy..e.g.
http://www.landlordzone.co.uk/forums/showthread.php?54890-Letting-Agent-did-not-protect-our-interests-what-can-we-do

I wouldn't touch these schemes with a barge-pole, personally.

Just get full tenant/checks & references & get Landlord insurance n (eg NLA )
http://www.landlords.org.uk/services/nla-property-insurance
and then buy your own "Rent Guarantee" insurance IF (and only if..) the tenant checks meet the insurance requirements...


. A carefully chosen tenant is your best guarantee...

Cheers!

captainawsome

Thanks for the advise guys, and the links. Looks like we have some thinking to do, both working full time and sometimes into the night we really need to offload the landlord duties, as we just can't commit to it as much as we should do. Thanks again for the info and ill let you know what we decide to do.

chappers

The problem with most of these sorts of schemes is you will never know how good they are until it's time to claim, research, research, research and try and find information from people who have made claims in the past.