Sara Hawkins, Rentals Director for Payton Jewell Caines explains how you can guarantee your rental income
It’s every landlord’s worst nightmare: a tenant who can’t, or won’t, pay the rent.
In fact, the National Landlords Association (NLA) found that nearly one in two landlords (47 per cent) have experienced rental arrears in the past 12 months and, for many, that means difficulty meeting mortgage payments.
A rent guarantee warranty means landlords get paid even when the tenant defaults, giving you time to consider your options regarding the tenancy, rather than rushing to evict the tenant or missing mortgage payments.
Of course, some landlord building insurance policies include ‘rental cover’ but this doesn’t mean it will pay out if a tenant falls into arrears. In most cases it only reimburses lost rent for periods when a property is uninhabitable because of another insured event such as a fire.
Most policies will require that the landlord has an Assured Shorthold Tenancy Agreement in place,and that the tenant has passed credit and reference checks. Landlords will also be required to take and protect a deposit.
The main thing to look for is when the policy will start to pay out. Some will do so almost immediately, but with others you might have to wait 60-90 days. Similarly, the duration for which the policy will pay out also varies; some policies may payout for six months only and others will pay out until the tenancy is brought to an end and when possession is legally granted.
At Payton Jewell Caines, we offer a Rent Guarantee service for our landlords that guarantees the rent will be paid whether or not a tenant pays, or if the property is empty. We also carry out regular inspections to ensure it’s being kept as well as you’d be keeping it if you were living there yourself.
The benefits of Rent on Time are profound. It guarantees the cash flow on your property portfolio as it will pay the rent on time, everytime, even if the tenant defaults! You can rest easy in the knowledge that your monthly rental payments are guaranteed and fully safe guarded right up to vacant possession. You also get full legal expenses cover and we handle all communication with the tenant and any dispute resolution costs including securing court orders where necessary.
Most tenancy agreements run like a dream but our Rent on Time will quickly stop those dreams becoming nightmares when tenants fail to pay.
By PJC Homes on March 29th, 2017