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Which is better? Private renting or guaranteed renting?


Private renting and guaranteed rent in Croydon and South London, both have their benefits. However, which one is more beneficial for you the Landlord? In this article, we will be looking at how private renting compares to guaranteed rental contracts. We will also be looking at how guaranteed rent and private renting affect landlords and tenants.


In London and South London there is currently lower demand for rental properties. Coupled with job losses and an increase in instability due to the pandemic, there is a growing worry amongst landlords about private rentals. This has caused an increasingly large surge of interest in guaranteed rental schemes and their benefits.


What is guaranteed rent?

Guaranteed Rent, even its name is compelling. But what is so special about the guaranteed rental scheme in South London and what does the scheme offer?


Guaranteed Rent is where a landlord signs over their rental property to a company, letting agent, or institution for a period of time. In exchange, they receive a guaranteed monthly income. This is regardless of whether or not the property has a tenant.


The company and or organisation that is renting the property from the landlord then sublet the property to tenants and manages the property and tenancy. However, the renters who occupy the property have no direct relationship with the landlord. The tenant only deals with the company/organisation who may be referred to as the middle Tenant in this situation.


How does guaranteed rental work?

The company, organisation or estate agent (the middle tenant) signs a contract guaranteeing to pay a set monthly income to the landlords. In return for taking full control of the property and its management.

The middle tenant will market the property to find renters. The company will do all of the tenancy administration and handle any property maintenance. They will also ensure that the property is compliant with all relevant legal requirements. If the tenants in the property need evicting, it is the company that will take care of legal proceedings.

What are the Pros of a guaranteed rental scheme?

There are multiple reasons why this scheme has a growing interest and is beneficial for many landlords in the country:

  • Guaranteed rent is the most ‘hands-off’ option available to landlords. Especially for landlords with no time or inclination to be involved in any part of the lettings process.

  • Ensures that there is always a predictable cash flow

  • There is less risk of having to enter legal eviction proceedings

  • Less risk of having to deal with damage and repairs that concern the property

  • Local authorities are among the most reliable ‘tenants’ a landlord can find

  • When a property is leased through a local authority, the landlord will be helping to provide housing for those most vulnerable and in need. This makes a positive contribution to the local community

  • Landlords receive payment from the middle tenant even when the property is unoccupied. What this means is that there are no void periods for the landlord

In comparison to private renting this is huge! It is obvious that private renting offers you flexibility. However, it also results in you (the landlord) maintaining the property, consulting the issues and meeting money matters.

What are the cons of guaranteed rent schemes?

Guaranteed Rent Scam risks

You should ensure that the estate agency to which you are letting your property is reputable, as you will be entering into a contractual agreement with them. Make sure that they make regular payments to you. Not performing thorough checks on the estate agents could result in legal expenses and reputational damage.


Landlord Liabilities

As the landlord or property owner, you are liable for injuries that occurred at the property. Whilst you aren’t responsible for maintaining the property. The landlord is still the property owner, which may mean that you are liable to claims made against you for injuries at the property.

It is important to agree on reasonable timescales to fix particular property issues with the estate agent. This is dependent on their severity and risk to tenants’ safety.


Hidden Extra fees

You will need to set up a contract to protect you and your property when using a guaranteed rent scheme which could incur an additional cost for legal fees.

Your limitations on property access

When you enter into a contract for a guaranteed rent scheme in Croydon, it can last for anywhere between 1 to 10 years. This means that you have little say in what goes on in your property for that length of time, including any renovations in your property.


Landlord Insurance

Insurance can be difficult when it comes to a guaranteed rent scheme. Most of the time the landlord is responsible for landlord insurance. However, this should be discussed with the estate agent.


It is also worth noting some UK insurers have restrictions on a guaranteed rent scheme. Hence make sure you check with your insurer when considering a guaranteed rent scheme.


Is your property suitable for guaranteed rental?

Even if a guaranteed rent scheme sounds perfect for you, your property may not be. Factors such as location or size can make it difficult for your estate agent ‘tenant’ to attract sub-tenants. This could potentially lead to an undesirable sub-tenant as the third party desperately tries to fill the vacancy.


If you would like to know more about guaranteed rent in and around Croydon, London or South London area - give Prime Relocate a call - follow this link and book in some time for a chat or free property evaluation.


Private renting and guaranteed rent in Croydon and South London, both have their benefits. However, which one is more beneficial for you the Landlord? In this article, we will be looking at how private renting compares to guaranteed rental contracts. We will also be looking at how guaranteed rent and private renting affect landlords and tenants.


In London and South London there is currently lower demand for rental properties. Coupled with job losses and an increase in instability due to the pandemic, there is a growing worry amongst landlords about private rentals. This has caused an increasingly large surge of interest in guaranteed rental schemes and their benefits.


What is guaranteed rent?

Guaranteed Rent, even its name is compelling. But what is so special about the guaranteed rental scheme in South London and what does the scheme offer?


Guaranteed Rent is where a landlord signs over their rental property to a company, letting agent, or institution for a period of time. In exchange, they receive a guaranteed monthly income. This is regardless of whether or not the property has a tenant.


The company and or organisation that is renting the property from the landlord then sublet the property to tenants and manages the property and tenancy. However, the renters who occupy the property have no direct relationship with the landlord. The tenant only deals with the company/organisation who may be referred to as the middle Tenant in this situation.


How does guaranteed rental work?

The company, organisation or estate agent (the middle tenant) signs a contract guaranteeing to pay a set monthly income to the landlords. In return for taking full control of the property and its management.

The middle tenant will market the property to find renters. The company will do all of the tenancy administration and handle any property maintenance. They will also ensure that the property is compliant with all relevant legal requirements. If the tenants in the property need evicting, it is the company that will take care of legal proceedings.

What are the Pros of a guaranteed rental scheme?

There are multiple reasons why this scheme has a growing interest and is beneficial for many landlords in the country:

  • Guaranteed rent is the most ‘hands-off’ option available to landlords. Especially for landlords with no time or inclination to be involved in any part of the lettings process.

  • Ensures that there is always a predictable cash flow

  • There is less risk of having to enter legal eviction proceedings

  • Less risk of having to deal with damage and repairs that concern the property

  • Local authorities are among the most reliable ‘tenants’ a landlord can find

  • When a property is leased through a local authority, the landlord will be helping to provide housing for those most vulnerable and in need. This makes a positive contribution to the local community

  • Landlords receive payment from the middle tenant even when the property is unoccupied. What this means is that there are no void periods for the landlord

In comparison to private renting this is huge! It is obvious that private renting offers you flexibility. However, it also results in you (the landlord) maintaining the property, consulting the issues and meeting money matters.

What are the cons of guaranteed rent schemes?

Guaranteed Rent Scam risks

You should ensure that the estate agency to which you are letting your property is reputable, as you will be entering into a contractual agreement with them. Make sure that they make regular payments to you. Not performing thorough checks on the estate agents could result in legal expenses and reputational damage.


Landlord Liabilities

As the landlord or property owner, you are liable for injuries that occurred at the property. Whilst you aren’t responsible for maintaining the property. The landlord is still the property owner, which may mean that you are liable to claims made against you for injuries at the property.


It is important to agree on reasonable timescales to fix particular property issues with the estate agent. This is dependent on their severity and risk to tenants’ safety.


Hidden Extra fees

You will need to set up a contract to protect you and your property when using a guaranteed rent scheme which could incur an additional cost for legal fees.

Your limitations on property access.


When you enter into a contract for a guaranteed rent scheme in Croydon, it can last for anywhere between 1 to 10 years. This means that you have little say in what goes on in your property for that length of time, including any renovations in your property.


Landlord Insurance

Insurance can be difficult when it comes to a guaranteed rent scheme. Most of the time the landlord is responsible for landlord insurance. However, this should be discussed with the estate agent.


It is also worth noting some UK insurers have restrictions on a guaranteed rent scheme. Hence make sure you check with your insurer when considering a guaranteed rent scheme.


Is your property suitable for guaranteed rental?

Even if a guaranteed rent scheme sounds perfect for you, your property may not be. Factors such as location or size can make it difficult for your estate agent ‘tenant’ to attract sub-tenants. This could potentially lead to an undesirable sub-tenant as the third party desperately tries to fill the vacancy.

If you would like to know more about guaranteed rent in and around Croydon, London or South London area - give Prime Relocate a call - follow this link and book in some time for a chat or free property evaluation.

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