For many of us, 2020 reiterated the importance of planning for the unexpected. Here at Simpson and Weekley, we want to ensure that our landlords suffer no financial losses whilst renting out their properties, safeguarding the returns on their investment. Here we discuss how the Rent Guarantee Scheme can provide landlords with financial peace of mind during the rental process.
What is the Rent Guarantee Scheme?
The Rent Guarantee Scheme is an agreement between the landlord and insurer, providing protection to cover the rent in instances where you have not received rental income from your property. It offers stability in circumstances where landlords would previously experience negative cost damages in unexpected situations. We provide our landlords with the option to use our highly recommended Rent Guarantee Scheme which covers you for £2500 per month for up to 6 months.
Even the most reliable tenants can fall on difficult times affecting their ability to pay their rent. Not only can this cost thousands, it can also affect your ability to stay on top of mortgage payments, result in expensive legal fees and further loss of income while the property is being prepared to let again if the tenant eventually leaves. Below, we’ve explained in further detail the reasons why, as a landlord, you should consider the Rent Guarantee Scheme, now more than ever.
Unstable job market
As we know, the COVID-19 crisis has created nationwide economic upheaval. In an uncertain job climate, tenants might find themselves out of work and unable to pay rent - this is worrying for tenants and landlords alike. Therefore, having guaranteed rental income through the Scheme regardless of your tenant’s ability to pay provides landlords with some protection against financial loss during uncertain times.
Changing family situations
Alongside financial difficulties, tenants might find themselves in a position where they need to relocate. The pandemic has placed family situations under pressure and for some has meant moving to be with loved ones. The Scheme reduces the worry for landlords if their tenants make any hasty decisions to relocate from your property and therefore stop paying their rent while still within the contract.
Evicting tenants can be costly
We hope that our landlords never have to evict their tenants. However, if an eviction process needs to take place due to a breach of the tenancy agreement, it can be expensive. In a worst-case scenario in which your tenant needs to be evicted, it can take landlords on average up to 42 weeks to regain possession of a property. The Rent Guarantee Scheme offers legal support during the eviction process, alongside expense cover up to £50,000 as well as a faster eviction time of approximately 124 days.
It is clear that now, more than ever, the Rent Guarantee Scheme might be a sensible consideration for landlords to ensure renting their property remains a viable investment. During turbulent times such as these, it can provide some peace of mind in protecting against losses alongside covering unexpected repair or legal costs. For more information about how the Rent Guarantee Scheme can support our landlords, get in touch today.