Guaranteed Rental Plan

How it will work:-

• We will pay you the Guaranteed Rental Plan offered in our brochure/web-site.
  • We will make the first payment to you by BACS transfer around 14 days after completion the following amounts:-
  • The first months Rent as guaranteed by us.
    • even though you are not likely to have paid your mortgage by this point. This gets you moving and cash positive right away.
  • The average void periods for 2 years. (for voids, see below)
• When we have found you the tenant and established what their rent payable is we will then send you:-
  • The whole of the remaining rent; less what is anticipated from a tenant over the next 2 years.
  • You can keep all of the rent increase from your tenants after your first year.
  • When we have made this final payment - the matter will be closed.
• We will estimate the rent to be received for the property at the time we put the market on the property, then calculate an monthly over-payment to ensure a safety margin. This is the offer made on our web-site/brochure.
  • The safety margin is probably around 20% more than the normal rent payable.
• If your property is in a rentable condition, we shall look for tenants straight away, but pay you from day one in any case.
• The Guaranteed Rental Plan will be made up of tenants income, plus our Rental Guarantee subsidy.
  • Where there is no tenants income from day one, we will pay you the full amount agreed/offered.
• In practice, what we will do is to find a tenant, establish what rent the tenant will pay; then calculate the difference between what the tenant will pay and what we have offered and send you the difference in a lump sum.
  • ie: If the Guaranteed Rental Offer is £1,000 per month, and we find a tenant that can pay £750 per month, we will send you in a lump sum 24 x £250 = £6,000 (plus voids - see below).

• If your property needs 'repairs' etc., we will pay you the full first months rent and give you 1 month to bring the property to a rentable condition.
  • If you have not completed the repairs after 1 month, we will still make a monthly payment to you but by the amount of our offer, less the current market rate.
    • (ie: if our rent guarantee offer is £1,000 and the market rent is £750 and your property is not ready after 1 month, we will pay you £250 net, until the property is in a rentable condition).
  • This is so investors do not drag on 'redecoration' for months (or years) without a tenant and we find we have to pay out without a contribution from the tenant.
  • A rentable condition will be defined by the local rental agents we will commission on your behalf.

• We will also guarantee for 2 years, the rent will be paid by the tenant.
  • If the tenant fails to pay rent then the rent that ought to have been paid will still be paid to you.
  • We can make this offer as we insure the tenant and therefore the payment will be subject to the insurance companies terms and conditions.
• If you decide to live in the property, we will still pay you the difference between the average market rent for the area, and our Rental Guarantee Offer.
  • ie: If you are living in the property, and our Rental Guarantee Offer is £1,000 per month, but the average rental estimate is £750 per month; we will send you 24 x £250, plus 4 weeks void of £923 (see below) = £6,000 + £923 = £6,923 at completion.
• Void periods:
  • Rents will be paid assuming void periods of 2 weeks per year (click here) which are the most up to date figures available.
• This means that 4 extra weeks rent will be paid to you after legal completion, to take account of the 2 year void of 2 weeks per year.
• If there is no void, then you have won.
• If there are more than 4 weeks void, then there is no further payment due from us.

• If you prefer to simply take the lump sum cash option, we will calculate the average monthly market rental for your property from the Guaranteed Rental Plan offered, and send you a payment for the difference.
  • ie:our offer £1,000 per month, less 'market rent' of £750 per month, means you will get a lump sum payment we will send you 24 x £250, plus 4 weeks void £923 = £6,000 + £923 = £6,923 at completion. Our Guaranteed Rental Plan option will then expire.
  • We do this because you will have tenant income over the 2 years, to make up the difference between the actual rent paid and the rental subsidy we are making.