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Rental Guarantee Insurance versus Rent Guarantee Scheme

11 November 2014 / By: / Under: Company News

Assetgrove officeMany people, including landlords, get confused about the difference between Rental Guarantee Insurance and Rent Guarantee Schemes. They may sound similar in name, but in fact they are very different.

Rental Guarantee Insurance will protect you in case your tenant fails to pay the rent. After all,  every landlord’s nightmare is a tenant who can’t or who won’t pay the rent. Although landlords do their utmost to try to find reliable people who will keep their properties in the best possible condition; sometimes events are beyond their control.

And let’s face it: if a tenant does fall behind on rental payments, there could be serious financial implications, particularly if you have to pay regularly for your mortgage.

However, if you are going to purchase rental insurance it’s best to go for proper rental guarantee protection rather than just normal landlord insurance policies. This is because the latter includes building and contents, liability cover, emergency assistance and legal cover. These pay out if you need to take tenants to court, but they won’t usually if tenants fall into arrears. Often it only really reimburses lost rent for periods such as when a property is not possible to inhabit – such as in the event of a fire.

In comparison to bog standard insurance policies, specialist rent guarantee protection will make sure landlords get paid, even when the tenant defaults. This gives them time to consider their options regarding possible evictions. Purchasing guaranteed rental cover is relatively cheap and can be bought as an add-on to standard insurance – or even as a separate policy.

Pitfalls

However, it’s important to be aware of the potential problems when it comes to these schemes. Landlords and tenants will have to meet certain conditions to ensure a tenancy is covered by rent insurance. Most policies will require the landlord has an Assured Shorthold Tenancy Agreement in place and that the tenants have passed reference checks. As well as this, landlords will need to take deposits. If you miss anything, there’s the risk that the insurer won’t pay up. Also make sure you check when the policy will start to pay out and for how long – always read the small print!

Rental Guarantee Schemes

Under Rental Guarantee Schemes, landlords are able to live hassle-free, without worrying about any of the stresses that come with the job. The idea is that you sign over the property to a letting agent for a period of time in return for a guaranteed monthly income and then the agent can let the property along with any profits they make after what they pay to the landlord.

Here at Assetgrove we ensure the ultimate in peace of mind for our clients through our Rent Guarantee Scheme. We take the headaches out of all aspects of tenant management – our team of maintenance people are always on hand to help out with issues that may arise. As well as this, we make sure you don’t get any loss of income or suffer from void periods and that there are no commission or management fees to pay.

We’re proud of our track record and that we can offer guaranteed rent for up to five years. Whatever the size of your property portfolio, we can help. We’re devoted to keeping property standards high and ensuring occupancy levels are consistent and let a property often within 48 hours of taking it on.

So when it comes down to it, the insurance option simply isn’t as flexible and convenient as our Rental Guarantee scheme. The back-up isn’t there in the same way, and you still have to concern yourself with all sorts of issues you may want to avoid. Why not give us a call and we can talk you through the details? Your life could be so much easier if you take us up on our offer!

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