Why use a Guaranteed Rent Scheme?

What is a Guaranteed Rent Scheme?
What is a guaranteed rent scheme? Over the last 6 months many people have asked me this question. My hope is that this article will help to answer this question for landlords and estate agents.

Contractual Agreement
A rent guarantee is a contractual agreement that can be made between a landlord and a estate agent. The purpose of the agreement for the landlord is to get a recurring long term guaranteed rent payments for a property or a property portfolio over a defined period of time. The rationale for the estate agent is to have a property or portfolio under their management for a specified length of time in that  they will work to make certain that they are delivering a revenue by means of keeping the property rented out to suitable clients.

Property Inspection and Maintenance
The estate agent will take on the role of managing the property, this often time will incorporate carry out regular inspections of the property to keep the property in a rentable condition and sourcing reliable tradespersons to maintaining the condition of the property to a appropriate condition for the duration of the contract. Always be aware that wear and tear is taken into account.

Landlord Payments
The estate agent will plan for the rental of the property to suitabletenants. The rental payments will be paid to the estate agent by the tenants; meanwhile the estate agent will be having to pay the agreed month to month payments to the landlord in spite of any differencesin the marketplace price for rent. If the occupant defaults on their on their rent payments, the landlord will have to continue to make payments to the landlord as fixed in the agreement.

Summery
A guaranteed rent scheme will ensure month-to-month payments to a landlord while the estate agent will inspect the property furthermore maintain the condition of the property. The estate agent will have the advantage of possessing a long term contract to rent out a property. The landlord will have the advantage of a recurring month to month income, without the hassle of running the property or the tenants.

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