If you are a landlord, you might have felt it challenging to put your property on rent and face other problems like finding a trustworthy tenant, getting rent on time, dealing with the lawsuit, and much more. If you are one of the worried landlords, you need to know about the guaranteed rental income to eliminate the risk of voids and rental arrears.
What is Guaranteed Rent?
Guaranteed rent is also known as a rent-to-rent scheme under which a landlord signs over his property to an individual or a company for a specific period for a contracted amount of rent for a period starting from 6 months to 10 years. With this scheme, you can get a stable income.
If you are a landlord looking for a guaranteed income in North London, get your valuation done by City Borough Housing for free. They guarantee you the rent even on void periods and you can enjoy the benefit of free property maintenance for three years. There are no commissions or hidden charges involved. Find out more details by visiting their website.
How Does Guaranteed Rent Work?
Under this scheme, a landlord allows a third party to be a tenant of his property. The tenant in turn undertakes the responsibilities of the property and sublets it. His responsibilities may include finding tenants, paying the bills, and maintaining the property in good condition.
Advantages of Guaranteed Rent
- Whether the property is occupied or not, as a landlord, you will receive the rent from the third party.
- Usually, it is the responsibility of the owner to pay for emergencies such as fire, flood, etc. However, with the rent-to-rent scheme, you can be at peace of mind without worrying about any midnight emergency calls since it is now the responsibility of the third party.
- You can enjoy your holidays without worrying about your tenants and property.
- No more worrying about the maintenance checks and cost of it.
- You need not also bother about regulatory concerns, paying utility bills, and other legal expenses.
- Finding new tenants for your property, and advertising for that, are no more a headache for you and the third party will take care of that.
Drawbacks of Guaranteed Rent
Though there are these many benefits to this scheme, there are also downsides to this. You should do a thorough check about the third party before entering into a contract. Otherwise, it may result in unnecessary legal expenses and reputational damage.
As a landlord, you won’t be knowing who the tenant of your property will be. When it is deemed that the third party will be responsible for all the maintenance and repair works, there might be some long-term damage to your property that could last even after the lease period ends. This may lead to the devaluation of your property.
To manage these kinds of disputes, it is recommended for the parties involved in this agreement to join a redressal scheme to complain and resolve the issues that can’t be solved between yourselves.
Hence, before you enter into a guaranteed rent scheme, do the needed research to make sure they have the right license and experience in this field.