Last Updated on: 22nd November 2023, 05:28 am
By using this service, landlords will have the security of knowing that they will receive their rent regardless of tenant payment.
Not only does it provide an ongoing stream of rental income but also offers other advantages such as eliminating tenant issues and property maintenance costs.
What is Guaranteed Rent UK?
Rent guarantee schemes provide landlords with a fixed monthly rental income for their property regardless of whether or not their property is occupied. This means that landlords and UK property owners can be sure to receive regular payments with no voids, rent arrears or agency fees.
The rent guarantee company offering this service will typically take responsibility for finding and managing tenants, usually renting the property on behalf of the landlord as a holiday let and or serviced apartments. The company collects the payments, cleans the property and takes care of any property maintenance issues that may arise.
Family-run UK 53 Degrees Property offer guaranteed rent contracts between 3 to 5 years. Director and co-founder Daniel Budden explains their guaranteed rent service:
“Our service helps landlords to achieve long-term guaranteed rent with zero hassle from tenants or letting agents. The cost of maintaining a property each year sits at roughly 1% of the property’s value. With the current average house price hitting £278,436, this means annual maintenance costs total £2,784 per property for private and social landlords and management companies. With guaranteed rent, the maintenance cost is reduced as 53 Degrees Property takes on most of the associated cost.
Guaranteed Rent also means you have a long-term contract direct with the guaranteed rent company meaning no tenancy fee costs or renewal fees. However, Traditional Lettings agents charge tenancy renewal fees which can be up to 10% of annual rental income yearly.”
The Benefits of Guaranteed Rent for UK Landlords
One major benefit of guaranteed rent is that it offers landlords financial security; they know exactly how much money they will receive each month without having to worry about late payments or other potential problems associated with renting out properties on the open market. Additionally, since most companies offering this service also manage all aspects related to renting out a property and tenancy agreements, such as finding suitable tenants and handling maintenance issues, it can save time and hassle for busy landlords who don’t want to deal with these matters themselves.
In exchange for providing these services, landlords will get peace of mind knowing that no matter what happens during the contract term, they will always receive a steady stream of rental income from the property every month. This makes it easier than ever before for busy landlords or investors looking for reliable returns on investment opportunities.
Key Takeaway: Guaranteed rent offers landlords financial security and peace of mind, providing a fixed monthly rental income regardless of occupancy status. Benefits include consistent income; no need to find new tenants; time-saving property management services.
Advantages of Guaranteed Rent for Landlords
No Tenancy Issues & Long-Term Contracts
As mentioned, this type of service eliminates the need for landlords to find tenants and deal with any tenant issues, such as late payments, damage to their property or eviction costs. Guaranteed Rent also offers them long-term contracts, so landlords don’t have to worry about regularly finding new tenants as they will be paid whether the property is occupied or not.
Property Upkeep & No Maintenance Costs
Furthermore, guaranteed rent services also remove any maintenance costs associated with managing their property since the company providing the guaranteed rent will take care of the cleaning after a tenant stays, as well as any unexpected repairs and general upkeep.
Consistent Income
One major advantage of using a guaranteed rent service is that it provides landlords with a steady stream of income each month without having to worry about tenant issues or maintenance costs. This can be especially beneficial for those who own multiple properties since they won’t have to spend time dealing with individual tenants in each one. Additionally, because these services typically offer long-term contracts, landlords can rest assured knowing that their rental income will remain consistent over the agreed time.
Legal & Experienced
Another benefit of using this type of service is that it eliminates any potential legal issues related to renting out properties in the UK. The company providing the guaranteed rent will handle all aspects related to the holiday lets and short stay and ensure compliance with relevant laws and regulations in England & Wales (or Scotland). This means that landlords don’t have to worry about being held liable if something goes wrong during the tenancy period – which could save them from costly court proceedings down the line.
Flexible & Convenient
Finally, while there are some restrictions on how you use the property when signing up for a guaranteed rent agreement (such as not being able to sublet), these are generally minor compared to other types of rental arrangements available in the UK today. As such, many people find this option attractive due to its flexibility and convenience, allowing them peace of mind when it comes time for collecting monthly rental payments.
Guaranteed rent offers landlords a secure and reliable income stream with no tenant issues or maintenance costs, making it an attractive option for many. However, there are some potential drawbacks to consider before entering into a contract.
Key Takeaway: Guaranteed rent offers landlords a reliable source of income each month with long-term contracts, maintenance costs covered, legal compliance and flexibility.
Disadvantages of Guaranteed Rent for Landlords
One of the potential drawbacks to using a guaranteed rent service for landlords in the UK is the loss of control over property management. When opting for this type of service, landlords must relinquish some control over how their properties are managed and maintained. This may be an issue if they want more involvement in decisions about their rental properties. However, most landlords who choose a guaranteed rent service are happy to pass on the maintenance responsibilities!
Another disadvantage return on investment. While most guaranteed rent services provide reliable income, they frequently require long-term contracts, and landlords may find themselves locked into agreements that do not reflect current market value and cannot easily adjust rents accordingly.
With 53 Degrees, though, the guarantee rent scheme works where landlords get what they could get on the open market rates—or in some cases more.
Guaranteed Rent is a great option for landlords in the UK looking to ensure a steady income and avoid tenant issues. With long-term contracts, no maintenance costs and guaranteed rent payments each month, it can be an attractive proposition for those who want to reduce their stress when it comes to managing rental properties.
However, there are some potential drawbacks such as higher fees than traditional renting models that should be considered before signing up for a guaranteed rent service. Ultimately though, with the right research and due diligence, Guaranteed Rent could provide landlords with peace of mind and financial security in the future.
