What is a Guaranteed Rent Scheme and Is It Right for You?
November 2, 2024
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TL;DR
A guaranteed rent scheme offers landlords a way to receive consistent monthly rental payments without the usual hassles of tenant management, property maintenance, or risks of arrears and void periods. This article explains how guaranteed rent schemes work, their benefits, and what to consider when choosing if they’re the right fit for your rental property.
What’s in This Article:
- What is a Guaranteed Rent Scheme and Is It Right for You?
- The Challenge: Inconsistent Rental Income and Tenant Management
- How Does a Guaranteed Rent Scheme Work?
- Key Benefits of a Guaranteed Rent Scheme
- Why Guaranteed Rent Solves Common Problems Landlords experience
- FAQs about Guaranteed Rent Schemes
What is a Guaranteed Rent Scheme?
Owning rental property comes with challenges, from late payments to extended void periods that can leave your income unstable. A guaranteed rent scheme offers a solution, providing landlords with consistent, on-time rental income while taking the hassle out of property management. But is this option right for you? Here’s what you need to know to make an informed choice.
The Challenge: Inconsistent Rental Income and Tenant Management
Many landlords face the same frustrations:
Inconsistent Income: It’s common to see rental payments arrive late or miss entirely when tenants are unable to pay, creating financial strain.
Costly Voids: Long void periods can mean months without income, especially if the property needs repairs or updates to attract new tenants.
Excessive Management Effort: Managing a property, especially one with multiple tenants or high turnover, is time-intensive. From maintenance to tenant complaints, it can become a second job.
Example: Let’s take James, a landlord from Manchester, who experienced several months of late payments from his tenants, forcing him to use his personal savings to cover mortgage payments. He also faced long void periods that added to his stress, as he struggled to find suitable new tenants and keep up with property repairs.
After several unsuccessful attempts at managing his property solo, James looked into a guaranteed rent scheme with Citywide Housing, hoping it would offer a solution.
How Does a Guaranteed Rent Scheme Work?
In a guaranteed rent scheme, a letting agent or specialist provider like Citywide Housing leases your property and pays you a fixed, agreed-upon monthly rent. Unlike traditional tenancies, where income is only received when tenants pay, this model ensures you’re paid on time, every time, regardless of tenant occupancy or potential arrears.
Citywide Housing’s Guaranteed Rent Programme goes a step further by handling property management entirely, freeing landlords from day-to-day involvement and ensuring compliance, maintenance, and tenant issues are fully covered.
Key Benefits of a Guaranteed Rent Scheme
- Consistent Rental Income
With guaranteed rent, you receive predictable payments each month, giving you peace of mind and financial stability, whether your property is occupied or not. - No Voids, No Hassle
Citywide Housing’s scheme eliminates void periods, which are often a major concern for landlords. We ensure your property is rented out in high-demand areas, minimising vacancies. - On-Time Payments Every Month
Say goodbye to chasing tenants for rent or worrying about arrears. Your rental income is deposited on a set date each month, hassle-free. - Complete Property Management
From sourcing tenants to handling maintenance, a guaranteed rent scheme covers all property management aspects. Citywide Housing’s dedicated team manages tenant issues, compliance, and upkeep, so you don’t have to. - High-Demand Property Areas
Citywide Housing specialises in properties located in areas with high rental demand, such as family homes, HMOs, and blocks of flats, helping you to maximise your rental returns and secure long-term tenants.
Why the Guaranteed Rent scheme Solves Common Problems Landlords experience
Many landlords, like James, try various strategies to ensure consistent rental income. Some attempt to:
Self-Manage: This can be costly in time and effort, especially when tenant issues or maintenance requests pile up.
Rely on Traditional Lettings: While this works for some, many landlords experience issues with unpaid rent and periods of vacancy.
Hire Traditional Letting Agents: This can help with finding tenants but often leaves landlords responsible for ongoing tenant management and maintenance.
These solutions often fail to address the root issues of income inconsistency and management burden. By choosing a guaranteed rent scheme, landlords like James have found a more reliable way to enjoy steady income and a stress-free experience.
FAQs about Guaranteed Rent Schemes
Most residential properties are eligible, including family homes, HMOs, and blocks of flats. Citywide Housing works with landlords to determine eligibility and offers comprehensive property assessments
Learn more about guaranteed rent scheme property types
Yes. Citywide Housing handles all property management aspects, including maintenance and tenant requests, so your property remains in excellent condition.
With guaranteed rent, your role is simplified. Citywide Housing takes on all tenant and property management responsibilities, allowing you to enjoy steady income without daily involvement.
Our management service includes regular property assessments to address any maintenance or repairs as needed, keeping your investment protected.
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