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It’s not quite as simple as it sounds—but having said that, it does precisely what it suggests.
A landlord, or property owner, is guaranteed a contracted amount of rent, every month, whether the property is occupied or not. A contract can last for a minimum of 6–12 months up to 5 and 10 years.
A guaranteed rent scheme sounds, simple really, dosen't it?
So, how does guaranteed rent work?
Letting a property comes with a whole host of responsibilities and operations. From collecting rent to dealing with issues, it is very time consuming.
If an owner holds a portfolio with more than a couple of properties, looking after them, and their tenants, can soon turn into a full-time job and they are not even sure to have a guaranteed rental income.
If you enter into a guaranteed rent programme or a rent-to-rent scheme, as it’s also known, everything associated with being the landlord becomes someone else’s responsibility. Your only job is to bank the payments. What’s not to like?
Consider the various responsibilities many landlords face:
Finding tenants / advertising / marketing
Property maintenance and upkeep
Rent collection
Housekeeping
Insurance
Paying utility bills
Eviction proceedings in the case of rent stops and eviction costs
Regular inspections
For a guaranteed monthly payment, you can stop worrying about all of the above. Think of the resulting free time you could generate from such a set-up.