Can You Let A Property For Guaranteed Rental Income Each Month?
Guaranteed Rental Income May Sound Like A Dream For Many Landlords But Is It Even Possible To Receive Guaranteed Rent Each Month?
Become Flex Living Landlord Today And Get Your Property’s Rent Guaranteed Every Month
In this article, we are going to discuss :
Naturally, rent is a pretty big deal if you’re a landlord. Letting any additional property you own for a (we hope) reasonable amount of money each month, is very much what all landlords want. Rent is typically paid monthly to the landlord and due to the terms and conditions set out in the tenancy agreement rent is effectively, guaranteed.
Except, it isn’t, not really. As a landlord, you’re reliant on your tenant paying their rent on time each month, which for the most part, does happen. However, you can never know for sure that rent will be paid on time and in some unfortunate cases, if it will be paid at all. This is exactly why guaranteed rent schemes are such an attractive prospect.
At Flex Living, we’ve managed thousands of properties and offered our expert services for property management in London to many landlords. Continue reading to understand how rent can be guaranteed each month or, if you are interested in working with a company that provides the best offer for guaranteed rent in London, look no further than Flex Living and become one of our landlords today!
1) What Does Guaranteed Rent Really Mean?
Guaranteed rental income can take many forms. There are different types of guaranteed rent schemes which can see a landlord receive rent through letting their property with:
- A property management company
- The local council or housing association
- Partnering with a business
Additionally, receiving any rent for a property in advance or, even the full amount for the duration of the tenancy all paid upfront, could also be seen as a form of guaranteed rental income for landlords. This can come through either a guaranteed rent scheme or a private tenant.
Now, this will provide landlords with payment security whilst their property is occupied. In the long-term, landlords want to avoid periods where their property is unoccupied with no one paying rent (void periods) and so might look to secure tenants on longer-term contracts for several years, which is another reason why guaranteed rent schemes are so attractive. Some companies offer guaranteed rent schemes for periods of up to 5 years!
However, landlords can end up not receiving rent at all depending on the shortcomings of either their tenant or, whatever rent scheme they are a part of that is supposed to be guaranteeing their rental income.
2) What Are The Most Common Cases For Not Receiving Rent?
The average landlord loses up to 5.7% of their rental income each year through voids. Whether it’s a tenant moving out and not having someone in place to take over the tenancy at a property straight away or, a tenant just decides they’re moving on before their agreement was due to expire, putting their landlord – out of pocket. You could have the best-behaved and most punctual tenant when it comes to paying rent on time every month but, if they decide to leave, the rent stops.
With that said, we know that events like this are only likely to affect a minority of landlords, however, other issues can get in the way of rent being paid. Disputes with agencies or property management companies you choose to partner with or, any issues which affect their ability to pay you your rent every month, are just a couple of possibilities that can all suddenly, start to make monthly rent for landlords, look a little less guaranteed.
If there were guaranteed rent schemes available for landlords to use, then how might they work and, would they solve all these issues when it comes to letting a property?
3) How Do Guaranteed Rent Schemes Work?
The idea of a guaranteed rent scheme has been around for a while but it has become noticeably more popular in the last decade. However, as attractive as the prospect of guaranteed rental income may sound for a landlord, it’s worth noting that many providers of guaranteed rent have different models for how they pay and it does help to pay attention to the differences between each model.
Local Council & Housing Association Schemes
Landlords can take part in various local housing schemes run by their local council, to sign up for what is effectively, guaranteed rent for landlords each month. These schemes can last for years and aside from guaranteeing rent at the property the entire time, the council will also take on maintenance and repair work at the property, which must sound like a dream to many landlords!
However, the reality is that these schemes are often connected to emergency or relief housing programs. Rather than have one tenant in place at a property for several years, a landlord could see potentially dozens of people living in their building throughout the year. This inadvertently can lead to property damage through high wear-and-tear, issues with neighbours and anti-social behaviour, so it pays to think before signing up for a scheme like this!
Pay Upfront Rental Agreements
One concept of a guaranteed rent scheme is receiving the rental income from a property either in its entirety up-front or, having it paid in fewer instalments. Legally, there is nothing against receiving the entire rent from a property upfront, as long as the tenant has signed a tenancy agreement which guarantees their stay in the property for however long the agreement lasts.
However, whilst some landlords might think of this as an easy win, examples of rent for a property being paid fully in advance are few and far between. Some guaranteed rent schemes will only last for 6 months whereas others can last for up to 5 years. But it doesn’t matter how much is being charged for the tenancy, paying that much rent in advance is a lot to ask of your average tenant!
Who your tenant is and the type of agreement you have with them is a massive part of how a property management company or agency will guarantee your rent. With traditional letting, it is almost impossible to guarantee rent, unless it is paid upfront and in advance which as we’ve just discussed, happens very rarely.
Holiday Letting Through Airbnb
Some landlords can access other guaranteed rent schemes by utilising their property as a permanent holiday let through holiday letting companies. They will pay you a guaranteed amount of rent for as many years as you agree for them to rent the property. The company will sublet your property through Airbnb and accommodate guests on short trips of up to a week for each booking for a higher price per night.
However, the holiday let model is very prone to crisis. Major incidents and global events like the pandemic put many property management companies of this nature out of business, as they were unable to keep paying the rent they had guaranteed for their landlords in their agreements. The company you choose to work with going bust is one of the biggest risks you face as a landlord when trying holiday-style letting at a property.
Whilst whatever company you choose to partner with will be paying you guaranteed rent each month, issues with high wear-and-tear remain. With so many people potentially overnighting in the property each month, issues with neighbours from guests having parties or being too noisy, etc, become much more common and cause more headaches for the landlord owning the property.
A popular solution to finding guaranteed rental income comes through corporate letting. Rather than letting a property out to a private tenant, a landlord can choose to let a business that wishes to use their property to house one of their employees. The agreements are usually fixed, the business renting the property normally offers to pay the market rate and, much if not all of the rent, is usually guaranteed by the company renting the property and paid in advance.
Corporate letting is a very attractive solution for landlords, especially in a big city such as London. Having reliable tenants from trustworthy companies, who are invested in keeping your property in good condition for the future, is a massive benefit for landlords and guarantees not only rent but also, peace of mind.
4) Letting With Flex Living
Flex Living don’t think landlords should be forced to accept lower profits and more headaches by losing out on their full rental income each month. This is exactly why Flex Living, as a corporate letting specialist – wants to offer landlords a better, fairer and more sustainable way of renting out their property, including a guaranteed rent scheme to pay landlords in advance for every month of their agreement.
Flex Living Offers:
- Guaranteed Rent: Rent is paid to landlords every month of their contract with them, in advance and, in full. That’s whether or not the property is occupied, empty or even undergoing repairs and provides a permanent, 0% voids guarantee as part of the service, saving landlords up to 6% on their average rental income each year.
- Zero Management Fees: A fee-free policy at Flex Living. There are no fees for letting your property and no hidden costs or figures. This saves landlords up to 10% (+ VAT) of their rental income each year on average.
- Fantastic & Reliable Tenants: Each tenant at all properties is supplied by corporate partners as one of their employees. They are all incredibly hard-working, professional and verified individuals, who are here to treat any property like they would their own home. Not cause problems for the neighbours or damage to anyone’s property.
- Professional Property Maintenance: Including a 24/7 dedicated maintenance team to tackle any issues with a property. Dealing with most issues instantly and, free of charge, without waiting for landlords to fix things themselves. For anything that’s too big for the team to handle or requires specialist help, landlords will always be contacted and informed first before any work is carried out.
- Reliable Property Management: A professional and fair service, dealing with all clients and landlords promptly, professionally and, on a personal level. Flex Living know what the pains of running a rental property are and that’s why the team is here to help you maximise what you can get out of yours, as easily as possible.
- Free Property Upscaling: An expert team of designers will step in and lift your property to the standards of Flex Living’s corporate partners for their employees. Whether it’s a new colour on all the walls, revamping the furniture or, adding some character to the place. Anything the team makeover is free and anything added to the property is yours to keep, forever, as a gift from Flex Living!
If you have any more questions about the letting model (like how we offer the best-guaranteed rent in London), want to enquire about switching to a corporate letting service for your property or, wish to contact us about finding an alternative to traditional letting with Flex Living – get in touch and speak to one of our fantastic team members today. You can also find more fantastic insights for landlords on our blog including everything you need to know about Deposit Protection Schemes and more!!