Guaranteed Rent and Maintenance Contracts with Professional HMOs & Social HMOs
As we always say, there are no magic silver bullets. Each strategy has its benefits and detriments.
Guaranteed rent can be obtained by one of three ways:
1. Via an insurance contract. This is where you pay a percentage of the rent to the
insurer, typically 3 per cent, or a fixed fee to the insurer to cover you against the
tenant defaulting. The tenant has to be credit checked initially for a nominal fee but
from then on the rent is guaranteed. All the companies listed in the credit checking
agencies above provide this service.
2. Obtaining a credit check for a one off fee, starting from £49, and then the rent is
guaranteed if the tenant defaults. All the companies listed in the credit checking
agencies above provide this service.
3. Getting a letting agent or institution to pay the rent direct. An agent called Northwood
Lettings, www.nthwood.co.uk and Your Move, www.your-move.co.uk provide this.
These are a growing chain of national estate agents who pay the rent direct to your
bank account even if the property is vacant. University institutions sometimes pay
guaranteed rent as they can then sublet on your property to the students. It is worth
contacting the university in the area that you are thinking of buying. Councils are also
paying guaranteed rent for asylum seekers or under the ‘Empty House Scheme’.
This is where the councils will even refurbish the property at no expense to yourself
through a government grant (maximum £12,000) in order to make your property
tenantable. Schemes that I have found are www.carrick.gov.uk, 01872 224399,
www.wealden.gov.uk, 01323 443378, www.hastings.gov.uk, 08000 858967 and
www.pavillion.co.uk, 01273 608311.
4. The fourth way is to let to a charity, council or service provider. Actually we have completed on over 50 Social HMOs that are on guaranteed rents with 5 and 10 year leases…No voids…No management…and No maintenance…However they are not finance able generally unless you have a relationship with your bank and possibly a professional landlord.
Regarding Maintenance Contracts with Professional HMOs & other useful issues Suggest you take a look at
https://homelet.co.uk/landlord-insurance
Please let me know if you have questions that we can answer on Professional HMOs and Social HMos.
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