BTL, rent guarantee offer from agent, is this a good deal?
Discussion
I've received a moderately alarming email from my agent saying the upcoming law changes are gonna be tough on landlords, however they can offer the following:
"Safeguard Your Rental Income and Protect Your Property
Should your tenant fall into arrears or breach their tenancy agreement, you will be paid the rent due, subject to the protection limits detailed below and your compliance with the Acknowledgement of Interest Form attached, and your tenants will be evicted for you at no additional cost to you.
Rent Guarantee provides the following benefits for any valid claims:
Monthly rent is paid up to a maximum value equivalent to 15 months’ rent or up to Vacant Possession, whichever is first
75% of the rent is covered for up to 3 months after Vacant Possession. This cover ceases once the property is re-let
Professional costs up to £100,000 to cover eviction costs if the tenant is in breach of their tenancy agreement or following an expired notice seeking possession
No deductions, 100% of your rent is paid (apart from normal agent fees and maintenance costs)
Professional assistance to recover possession of the property
Professional court attendance on your behalf
No excess to claim*
As part of our management service to you, we will provide the protection by including you, having an ‘interest in’ our Rent Guarantee policy with HomeLet. The cost of this protection is £36 (Inc VAT) per property, per month.
This cost is usually tax deductible so please ensure you take the relevant action to benefit from this."
My property is worth 200k, net income £750 a month (agent already gets £100/month). Never really had any problems with it, been rented out to four or five tenants no voids for the last 20 years, reasonable area commuter town to London.
So - is this a sensible deal? Should I shop around for something equivalent / cheaper? Does it cover enough to justify £36/month?
Cheers
"Safeguard Your Rental Income and Protect Your Property
Should your tenant fall into arrears or breach their tenancy agreement, you will be paid the rent due, subject to the protection limits detailed below and your compliance with the Acknowledgement of Interest Form attached, and your tenants will be evicted for you at no additional cost to you.
Rent Guarantee provides the following benefits for any valid claims:
Monthly rent is paid up to a maximum value equivalent to 15 months’ rent or up to Vacant Possession, whichever is first
75% of the rent is covered for up to 3 months after Vacant Possession. This cover ceases once the property is re-let
Professional costs up to £100,000 to cover eviction costs if the tenant is in breach of their tenancy agreement or following an expired notice seeking possession
No deductions, 100% of your rent is paid (apart from normal agent fees and maintenance costs)
Professional assistance to recover possession of the property
Professional court attendance on your behalf
No excess to claim*
As part of our management service to you, we will provide the protection by including you, having an ‘interest in’ our Rent Guarantee policy with HomeLet. The cost of this protection is £36 (Inc VAT) per property, per month.
This cost is usually tax deductible so please ensure you take the relevant action to benefit from this."
My property is worth 200k, net income £750 a month (agent already gets £100/month). Never really had any problems with it, been rented out to four or five tenants no voids for the last 20 years, reasonable area commuter town to London.
So - is this a sensible deal? Should I shop around for something equivalent / cheaper? Does it cover enough to justify £36/month?
Cheers
BoRED S2upid said:
Why are you paying them £100 a month? £136 would be madness and leave you with very little.
Fully managed letting fee based on a % of the (gross) rent collected? I thought these rent insurance premiums were insurance backed, but I suspect for the value of rent it's not far off the going rate.Armitage.Shanks said:
Fully managed letting fee based on a % of the (gross) rent collected? I thought these rent insurance premiums were insurance backed, but I suspect for the value of rent it's not far off the going rate.
It’s normally 8-10% of rent which seems low on a £200k house. Yes your bog standard landlords insurance protects rent and the agent should be supporting him with S21 and the likes so this seems unnecessary extra insurance.
Armitage.Shanks said:
Fully managed letting fee based on a % of the (gross) rent collected? I thought these rent insurance premiums were insurance backed, but I suspect for the value of rent it's not far off the going rate.
It’s normally 8-10% of rent which seems low on a £200k house. Yes your bog standard landlords insurance protects rent and the agent should be supporting him with S21 and the likes so this seems unnecessary extra insurance.
Rent Guarantee Insurance has already been around. I do have one as DIY, I do not use agents. To get the insurance your tenants should be eligible (credit history, employment, salary / rent ratio and etc...). I'm not sure about the fees and how they are at the moment, maybe check the website (openrent) and see their fees and compare. It is a good protection for unforeseen events.
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