Is Guaranteed Rent Worth It?
Guaranteed rent is a contract where a landlord gives control of their property to a third party. The tenant of the landlord acts as the third party and pays a fixed monthly rent. Therefore, guaranteed rent means a landlord gets paid consistently. But are there any negatives of this agreement?
The Pros and Cons Of Guaranteed Rent
Guaranteed Payments On Time
It is the third party’s legal responsibility to pay the property owner the monthly rent. So landlords do not need to waste their time calling up tenants and chasing them for their payment. Instead, the rent guaranteed insurance for tenants means a property owner can relax and wait for their monthly payment to come through.
Managing and maintaining a property is stressful and time-consuming. The beauty of the guaranteed rent scheme is that the third party handles all the tasks related to the property. Again, the landlord does not need to do anything which saves time and energy.
Save Money From No Utility Costs
Another advantage is the utility costs of a property will be covered by the third party. Therefore, you can save money as you don’t have to pay anything to maintain the property.
Regulations Are No Longer Your Concern
Health and safety regulations become the concern of the third party once entered into a guaranteed rent contract. So this is another thing you don’t need to worry about as a landlord.
Potential For Poor Maintenance Of Your Property
There is a chance the third party you are contracted to, does not do a sufficient job of looking after your property. As a result, they could damage your property which may decrease its value or force you to invest in repairs.
Your Property May Not Be Desirable Enough
Just because you have a guaranteed rent contract does not mean your property is perfect. If your property is in an inadequate location it could attract the wrong kind of tenants which could negatively affect its condition and make it even less desirable long-term.
It is possible to enter into a contract with scammers who want to make your property their own. So it is crucial to do background research on whoever you’re dealing with before agreeing.
You Don’t Make The Decisions Anymore
You lose your power when it comes to choosing who can rent the property which lasts as long as the contract. For example, if the contract is 2 years, you have no say whatsoever who can be a tenant at your property. Within this time, the third party could choose the wrong kind of people and cause damage.