Complete Guide for Landlord 

 

In the United Kingdom, residents prefer renting space rather than owning one. Approximately 23.5 million household residents are either social renters or private.

If you are looking to rent out your property and receive a steady rental income flow, it’s great for you to start the process today.

You can avail of guaranteed rent services from professional companies or agents to help you achieve your financial goals. It can also help you escape the hassle of looking for and managing tenants. 

But what does a rent guarantee scheme have to offer?

How can you, as landlords, benefit from it?

Let’s find out.

Peace of Mind with Landlords Guaranteed Rent

If you own a property in the United Kingdom, you can avail the benefits of the rent guarantee scheme, also known as a rent-to-rent scheme.

Being a landlord, you can sign over your rental property to a company, letting agent, institution, or individual for a specific time in exchange for a guaranteed income. 

Under this scheme, the rental income comes in regardless of whether the property is occupied or if the tenants are in arrears.

The organization or individual rents the property from you and then sublets the property to tenants and manages the tenancy and property. The property renters have no direct relationship with you, and the middle agents or companies handle everything.

How do These Schemes Work in the UK?

In a rent-to-rent arrangement, the middleman signs a contract with you stating that they promise to pay a set income and take full control of the property and its management. 

The middleman will market the property to find renters, manage tenancy administration, handle property maintenance, ensure that the property is compliant with legal requirements, and take care of legal proceedings if the tenants in the property need to be evicted.

The middle man agrees to a guaranteed rent with you below market value for the property. The success of a guaranteed rent scheme is based on whether the middleman can achieve a high rental income from the property to handle expenses and generate a profit. 

That’s why you must associate with professionals managing the guaranteed rent scheme for years who have experience attracting prospective clients.

Here are the options you have to complete the guaranteed rent deal.

Who offers them?

Public and private sector organizations operate guaranteed rent schemes.  

Local authorities

Many councils in areas with high demand for housing offer guaranteed rent schemes to increase their supply of social housing stock. 

Under the arrangement with a local authority, the council can become your ‘tenant’ and use the property to provide space for those in need of social housing, e.g. the homeless, refugees, and those who qualify for council tenancies.

In return, you receive a guaranteed monthly rental payment one month in advance during the lease period, even if your property is vacant. The local authorities perform regular inspections, professional property management, and guaranteed vacant possession.

Many local authorities outsource the work to other intermediary agents who communicate with private landlords and take care of property maintenance and management on their behalf.

If you want to lease directly to a council, then you need to provide your own compliance documentation and ensure that your property meets set quality standards before entering into an agreement. 

By contrast, if you go through a private facilitating agent, you don’t need to worry about the refurbishment and the maintenance as it’s a part of the terms of service with the management company.