GUARANTEED RENT FOR LANDLORDS - HELP FROM LETTINGFOCUS.COM
LettingFocus.com property mentor David Lawrenson explains how buy to let investors can get guaranteed rent through private sector leasing schemes.
Buy to let expert David Lawrenson of LettingFocus.com says, "There is a way that landlords can get a guaranteed rent for up to 5 years with no agent’s fees to pay and no voids."
It's relatively easy to do this.
You simply lease your investment property to a housing association, local authority or other third party provider working for a local authority - who then sublets it for you to people on their housing waiting list.
And since it is the ultimately the government that is paying the money, there is no chance of the rent not being paid.
Lease periods depend on the local authority and local housing needs but periods of 2, 3 or even 5 years are commonly used.
Often called “private sector leasing schemes” or "housing association lease schemes" the rent is usually set at the outset of the period and is in effect government money. The rental paid may be around 10 to 20% below private market rates but is paid straight into the landlord’s bank account usually on a monthly basis.
DIFFERENT TERMS
Each local authority and housing association has different terms and conditions and the amounts of rent paid vary as do the specific requirements of each operator.
In the case of a property I have had for 3 years with a London housing association, the rent is about 10% less than market rents but they fix and pay for basic plumbing and heating jobs as part of their own unique contract. And with no voids or letting agency fees to worry about it can work out very well indeed.
Some operators of private leasing schemes require the property to be part furnished but most require no furnishings – not even a cooker, shower or washing machine - thus saving on inventory management and insurance costs too.
The most common type of property required is one or two beds, though some areas are looking for three bed properties too.
Basement flats are rarely required and neither are studio flats or houses in multiple occupation (HMOs). The standard of the property required is high - any old property just won’t do.
Some mortgage lenders won't let you let out a property under a property leasing scheme but most do and the others can be persuaded.
ABOUT DAVID LAWRENSON AND LETTINGFOCUS
At LettingFocus.com our main work is in consultancy. We help organisations and public bodies with their products and services for the private rented sector.
If you are from an organisation or the media please go to our home page: LETTING FOCUS HOME PAGE.
As well as our work for organisations, we also offer a limited amount of unbiased consultancy advice for landlords.
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Copyright 2011 David Lawrenson. This article must not be copied or re-used without the author and copyright owner’s prior permission.
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