What are rent guarantee schemes?

Just like any other business, success in the buy-to-let sector is judged by your ability to maintain a steady income.


The most common way to achieve this is eliminating void periods when one or more your properties lies empty. But there is another way to guarantee your buy-to-let enterprise generates income 365 days of the year.

Rent guarantee schemes that offer little more than a form of insurance covering uncollected rent have come under fire.

But rent guarantee schemes that provide an entire package to the landlord, from managing the running of the property, dealing with tenant enquiries and guaranteeing rental income whether the home is occupied or not, are worth a second look.



What is involved?

Rent guarantee specialist Assetgrove – which provides landlords with a fixed guaranteed rental income for up to five years – summarises the main benefits of a typical scheme:


  • In return for the guarantee of a regular, fixed monthly income, the landlord agrees to lease the investment property to the provider of the rent guarantee scheme.


  • From that moment on, the landlord is effectively freed from any of the worry of running a buy-to-let business.


  • The rent guarantee provider is responsible for finding tenants for the property, drawing up the tenancy agreement and managing every aspect of the tenancy;


  • Typically, the rent guarantee provider also assumes responsibility for day to day maintenance and repairs to the property.


  • The single most important attraction for the landlord, however, is that the monthly rental income continues to be received whether or not the rent guarantee provider has succeeded in letting the property or whether tenants fail to pay their rent on time


  • And even if the tenants fail to look after your property, the rent guarantee provider may also be responsible for bearing the cost of making good any damage they cause.




As a way of keeping all of the hassle, work, time and effort at arm’s length, and still relying on a regular fixed rental income from the buy-to-let investment, a rent guarantee scheme is clearly likely to be attractive to landlords of any type of residential property.


Indeed, the attraction of securing such a reliable and well-protected rental income is a benefit that has not been lost on many local authority housing providers, especially in a major city such as London. Variations of rent guarantee schemes have also been recognised by charities such as Shelter, in playing an important part in the rental market.

By placing a property in the hands of a rent guarantee provider, landlords can be sure that their investment complies with the many rules and regulations affecting the private rental sector.

For anyone looking for guaranteed rental of their let or their residential property (where the owner-occupier will be living away for several months due to work commitments etc.), a rent guarantee scheme may be worth considering.







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