The guaranteed rent process can be daunting and confusing. By getting a general idea of the idea and processes, you will be able to make a more educated decision when it comes to your property.
What is guaranteed rent?
The concept of guaranteed rent is pretty self-explanatory but worth explaining in full. Guaranteed rent is when an individual or company is interested in renting a property for a long period of time and agrees to pay the landlord a fixed rent for a predetermined amount of time. The landlord gives consent for the third-party renter to sublet the property to other tenants.
Why would landlords choose guaranteed rent over traditional letting agencies?
As a landlord in a guaranteed rent agreement, you will get paid whether your property has tenants or if it is empty. The renter is responsible for paying your rental income each month, whether your property is filled or not. The renter is also usually responsible for any repairs or upgrades the property may need. In addition, the renter is expected to comply with all of the letting, management and renewal fees and compliances set by the county. This allows the landlord to have full peace of mind when it comes to the care and rental of their property. Generally, guaranteed rental agreements last anywhere from one to five years.
How does guaranteed rent benefit the renter?
The renter technically becomes the landlord of a property without owning the property itself. This allows the renter to find the ideal tenants, set their rental amount, and be able to make money off the transaction. Renters generally are able to allow more flexible agreements with their tenants, especially if there are shared areas of the property.
Are there any legal issues that should be considered?
Since the agreement between the landlord and the renter is of a commercial nature, it is a good idea to enter into a legally binding lease of the property for the period of time covered in the guaranteed rent agreement. There should be clear, precise and unambiguous terms of business that state the amount the renter must pay the landlord and what their responsibilities are as far as property management is concerned. By drawing up a legally binding agreement, there are no questions when it comes to payments or responsibilities from either party.
Are you interested in entering into a guaranteed rent agreement? Contact Everest Estates today to learn more about our guaranteed rent options! We offer schemes that last between three to five years and we aim to eliminate all hassle from renting out your property. Our guaranteed rent options are available to landlords throughout the greater Essex and East London areas.