Rent guarantee insurance is a risk management product that protects landlords against losses in the event of non-payment by the tenant. This insurance pays the monthly rent for a specified period of time if the covered tenant defaults. The scheme matches people in need of housing with landlords who have properties to rent. We pay the rent directly to the landlord, in advance.
We also guarantee to pay up to six weeks' rent as a bond, to cover expenses in the event that the property is damaged by tenants. Guaranteed renter's insurance is more for peace of mind than to serve as a financial income. Typically, the product lasts for the duration of individual tenancies with a premium ranging from 6 to 12 the monthly rent. Like all insurance, rent guarantee policies are inherently reactive - they wait for arrears to materialise - before talking about a payout; that can be anywhere from 8 weeks to pay rent arrears to an average of 41 weeks for repossession claims, according to the Ministry of Justice.
If your goal is to maximise income, minimise the risk of cancellations and arrears, and maintain a healthy distance from day-to-day leasing operations, the best solution is a combination of professional property management and rent guarantee insurance. In essence, the agent assumes full control of the asset for the agreed period of time in exchange for a monthly payment guarantee. Firstly, it should be noted that a rental guarantee scheme is not the same as rental guarantee insurance. Far from rent guarantee, both the federal and local governments are allying to take rent away from landlords through what appear to be unconstitutional new laws.
The only proper way to sign a lease with an agent who intends to sublet your property is to draw up a commercial lease. If you are prepared to wait and are not reliant on the income from that property to pay the mortgage, then it may be worth taking out rent guarantee insurance to give you peace of mind. We strongly recommend that you do your due diligence on any letting agency offering assured tenancy services by checking their credit and financial history at Companies House. Unlike council-run schemes, these are for-profit services that obtain tenants from the private rented sector through conventional property marketing channels.
What has always been a difficult part of every rental investor's job has suddenly become essential for survival. This gives them the opportunity to find tenants for the property and keep the rent paid by the tenants. This is leading to a surge of interest in assured tenancy schemes and their supposed advantages, with providers claiming that they offer a guaranteed regular rental income and eliminate the risk to landlords of vacancies, arrears and evictions. Instead of using a guaranteed rental scheme, let us take care of your asset while you enjoy the full return on your investment.
Although the guaranteed rental model does not fit the traditional definition of rental or property management, the landlord has a relationship with both the landlord and the tenants, acting as an "intermediary". The "Lessor" is generally also responsible for any damage to the property, as it is his responsibility to return the property to the owner in the same condition as when he took it.