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Rental Guarantee Insurance versus Rent Guarantee Scheme

28 September 2017 / By: / Under: Landlords

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

Rental Guarantee Insurance versus Rent Guarantee Scheme

Rental Guarantee Insurance will protect you should your tenant fail to pay the rent. Every landlord’s nightmare is a tenant who can’t, or won’t, pay the rent. The search for reliable tenants is an important one, but sometimes events are beyond a landlord’s control.  

If a tenant does fall behind on rental payments, there could be serious financial implications, particularly if you, the landlord, have to pay regularly for your mortgage. Protecting your property investment is essential.  

If you are going to purchase rental insurance, it is best to go for full rental guarantee protection as opposed to just normal landlord insurance policies. This is because the latter includes building and contents, liability cover, emergency assistance and legal cover. These are paid out if you have to take tenants to court, but are usually not if a tenant falls into rent arrears. Often it only reimburses lost rent for periods when a property is uninhabitable, such as in the event of flooding or a fire. 

In comparison to basic insurance policies, specialist rent guarantee protection will ensure a landlord gets paid, even when the tenant defaults. This gives a landlord time to consider their options regarding possible eviction. Purchasing guaranteed rental cover is relatively affordable, and can be bought as an add-on to standard insurance or even as a separate policy.

Pitfalls 

It is important to be aware of 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 to have an Assured Shorthold Tenancy Agreement in place, and the tenants to 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. Make sure you check when the policy will start to pay out and for how long. In other words, 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 offer peace of mind for our clients through our Rent Guarantee Scheme. We take the headaches out of all aspects of tenant management, and our team of maintenance professionals are always on hand to help out with issues which may arise. In addition, we make sure you don’t suffer any loss of income or void periods, and 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 with rent guarantee. We’re dedicated to maintaining high property standards, while ensuring occupancy levels are consistent. We often let a property within 48 hours of taking it on. 

So, when it comes down to it, the insurance covering option simply isn’t as flexible and convenient as our Rent 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 wish to avoid.  

Why not give us a call and we can talk you through the details and answer any questions you may have? Your life could be so much easier if you take us up on our offer.  

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