With the average asking price for a property in London reported to be a record £644,045, insurers are urging landlords inside the M25 to ensure their buy-to-let investments have adequate cover.
But do you have the right insurance cover? And, as a landlord, do you want to know what the difference is between a rent guarantee scheme and rent guarantee insurance?
It’s easy to see why confusion reigns among accidental landlords (homeowners who find themselves with a property surplus to their requirements), first-time buy-to-let investors, and even experienced landlords. The two terms have similar names, but entirely different meanings.
Rent Guarantee Insurance
A rent guarantee insurance policy is designed to protect a landlord’s income against tenants in arrears and deliberate defaulters. A form of property guarantee scheme, rent guarantee insurance is cover for a landlord, allowing them to protect their rental income.
Some of the companies which offer these policies claim that a landlord’s worst nightmare is a tenant who can’t – or won’t – pay the rent. Insurance companies will often cover up to £50,000 of rent arrears, plus legal expenses up to a similar amount. Some policies even come with no excess to pay, in the event of a claim.
But rent guarantee insurance does not cover a landlord during void periods. A void period is a time when a buy-to-let property is vacant. As no tenant is living there, no rent will be coming in, yet the landlord still has to pick up the bills, whether it be for mortgage repayments or maintenance charges. Nor will rent guarantee insurance policies reimburse a hard-working landlord for the time and costs involved in chasing rent arrears. However, there is a way around this threat to a landlord’s income.
Rent Guarantee Scheme
The Rent Guarantee Scheme offered by Denhan provides landlords with complete peace of mind for up to five years.
With the average rent in London now over £1,100 per month, that could mean a guaranteed income of £66,000 over the next five years. Our five-year Rent Guarantee Scheme takes away the stress associated with being a landlord.
We will first arrange a meeting with you and place a rental value on your property. After agreeing the monthly rental income based on the current market rate for the area, we will set a handover date. After taking possession of your property’s keys, we will assume full responsibility for it.
We have an extensive database of prospective tenants who are looking for a property to rent just like yours. We will market your property and find you a suitable tenant.
But before finalising the tenancy agreement, we carefully vet anyone who might be moving into your property, and carry out full reference checks. As an extra precaution, we may also ask the potential tenant to provide details of a guarantor.
We will then make an inventory of the property, with photographic evidence, before asking you to provide proof of the following…
- Building insurance
- Gas safety check
- NICEIC electricity safety check
- Smoke alarms
After taking a security deposit (we comply with all regulations to allow us to place the funds into an approved government scheme), Denhan will then collect and pay you your rent via an automated BACS system. We will pay it straight into your bank account.
We can take care of any issues that might arise, and send a member of our dedicated team to your property each month to ensure it remains in tip-top condition.
The Denhan Rent Guarantee Scheme is the ideal way to see your rental property earn money for you, giving a good return on investment. For a landlord, this is property letting made easy.
Do you have a question? For more information about our Rent Guarantee scheme or other services we offer to landlords within the M25, get in touch with us today.