It’s no secret that being a landlord involves a certain amount of financial risk. Your tenants may fall behind on rent or move out suddenly, leaving your property empty. Not to mention, when unexpected issues crop up, you’ll have to foot the repair bill.
Fortunately, there is a solution: guaranteed rent. This means giving consent for a third party to sublet your property in exchange for a fixed monthly fee. It’s a way of ensuring you receive an assured rental income every month, even during void periods.
But is guaranteed rent worth it? Are there any potential downsides? Below, we explore the pros and cons of guaranteed rent so that you can decide if it’s right for you.
Throughout the contract, you can rest assured that you’ll be paid on time every single month. Your income is 100% guaranteed, even if:
Pro: Financial Security
Throughout the contract, you can rest assured that you’ll be paid on time every single month. Your income is 100% guaranteed, even if:
- The property is temporarily unoccupied
- The tenants are late paying their rent or fall into arrears
- An accident or emergency occurs rendering the home uninhabitable (e.g. fire)
Con: Potentially Lower Rental Yield
On the downside, some guaranteed rent schemes may offer a lower rental yield compared with private lettings. This is because the management company takes a small cut of whatever income the property generates. It’s worth comparing quotes from different guaranteed rent providers, as some may pay more than others. Companies that let properties as short-term holiday rentals often prove more lucrative. At 53 Degrees, we’re proud to offer landlords a guaranteed rental income in line with current market rates.Pro: Long-Term Contracts
Most assured shorthold tenancies only last from 6 to 12 months. Periodic or ‘rolling’ tenancies are even shorter, operating on a month-by-month basis. This means that private landlords must be prepared to deal with a high tenant turnover. The moment they give notice to leave, you’ll need to start marketing the property and arranging viewings. If you can’t secure a new tenant in time, you may be faced with void periods of no rental income. You can avoid all of this stress and hassle by choosing a guaranteed rent scheme. At 53 Degrees Property, we offer risk-free long-term contracts ranging from 3 to 5 years.Con: Limited Control
With guaranteed rent, property management companies are responsible for finding and vetting tenants on the landlord’s behalf. This makes life easier for you, but also means that you won’t have control over who rents your property. Some landlords may be apprehensive at this idea. Remember, though, that the guaranteed rent company must pay you a fixed monthly income – even if the tenant doesn’t pay or abandons the property. They’re also responsible for handling evictions and repairing any damage caused by occupants. This means that they’ll always have a vested interest in choosing the most trustworthy tenants possible.Pro: No Dealing with Maintenance Issues
Being a landlord often feels like a full-time job. You must be available 24/7 to deal with maintenance issues such as:- Disruptions to electricity, heating or hot water
- Malfunctioning appliances
- Pest infestations
- Fires, electrical faults, gas and water leaks
- Security concerns (e.g. broken windows or faulty door locks)
Con: Not All Guaranteed Rent Agreements Are Equal
Not all guaranteed rent schemes are the same. Some companies may offer longer contracts than others, or charge extra for additional services (e.g. repairs). Terms and conditions can vary significantly, so read the small print carefully to ensure it’s the best guaranteed rent scheme for you. You should have a clear understanding of both parties’ responsibilities and what will happen if any terms are broken. Be aware that some guaranteed rent providers are more reliable than others. It’s important to do your research and choose a trusted company with plenty of positive reviews, such as 53 Degrees.Looking for Guaranteed Rent (UK)? Contact 53 Degrees Property
We are 53 Degrees Property: friendly, family-run providers of high-quality holiday accommodation across the UK. Our guaranteed rent service provides landlords with a secure, hassle-free way to earn a steady rental income. Our 3–5-year contracts offer long-term financial security free from void periods and rental arrears. We’ll keep your property professionally serviced and maintained to the highest standard throughout. To start your guaranteed rent application, contact 53 Degrees Property today. Fill in our online form or call 0330 058 0165 and we’ll get back to you with a quick estimate.Get a FREE Guaranteed Rent Valution
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