letting agent offering guaranteed rent

[erica-65]

I am not desperate - I just need my mortgage and costs covered with hopefully some left over as profit to enable me to move away for a few years so I can be near my elderly mother to look after her. But your comments are helping me to sort things out in my mind. My worry with a paid agent/landlord relationship originally. had been the void periods- as the rental market is very competitive.

[ram]

If you enter into a regular landlord/agent relationship then you
have the final choice on the tenants - the agent simply works for you. .

Above is correct, but with the guaranteed rent program, you have
NO say in who gets put in your property, and you cannot get them
out, as, You let to the agent who then forms a contract with the
council, and it gets messy trying to get bad tenants out.
It's the Council that ultimately has the contract with the tenant, so
the landlord is out of the equation often.

I have also read that you have to give ALL your keys to the council
as they dont want you applying for repossetion and having keys,
when the contract is with Council and tenant, not Landord and tenant.

You have effectivly "given" agent and council FULL powers over
your house for 3 years. You have no say in who lives there.

[erica-65]

Ok - I am seriously reconsidering, thanks to your advice.
I have just booked a private agent to come and see my property who then manage it for a fee.
Wish me luck!!!
I have looked at other posts about how to chose an agent and will be asking relevant questions as advised. I am so glad I found this website - you all have been great.
I will post a note to say how it went.

[ram]

My worry with a paid agent/landlord relationship originally
had been the void periods- as the rental market is very competitive.

EDIT, written before above post 13 came on screen

Thanks.
Yes there are void periods.
Same with the hire of similar priced construction equipment, hire
cars.
At the risk of offendng you more, you are running a business, and
costs of running that busines includes void periods, agents fees,
insurance etc, etc.

If you or anyone else thinks a business is not viable, then you
sell the house. Your comments seem to suggest that the house
letting is not a viable business model.

As a "Business woman", you have to make the decision to mitigate
your losses.
If a few void periods work out cheaper than having to do 3 total
refurbishments ( £ 30000 ) because you had tenants from hell who
trashed the place, then go for the voids.

If you are deteimined to carry on with the Council putting the
"Target group" in your house, then that is your decision, and we hope
all goes well, you come back in 3years and your house is fine.

Good Luck

R.a.M.

[erica-65]

i am not offended at all - I admit to being a novice both in renting and generally business.
Please keep the advise coming!

[Handson]

Like others have already said make sure you read the contract carefully even if that means taking it away and see who you're in contract with. It sure won't be the tenant.

Next do a search on the letting agent who will collect their fee before sending you a cheque in some cases and see what other landlords are saying about them. Granted, most people only put up complaints but if there are one too many of the same complaint run a mile.

[Paul_f]

I am not desperate - I just need my mortgage and costs covered with hopefully some left over as profit to enable me to move away for a few years so I can be near my elderly mother to look after her.

You MUST obtain written permission from your lender otherwise you will be breaching your mortgage deed. They will only allow you to offer a fixed term AST of 12 months maximum so "guaranteed rent" is out of the equation. Agents such as Northwoods offer guaranteed rent but they should ask if your lender will approve their terms and the answer would be "most unlikely".

You would in effect be handing over your property on a commercial type lease, and you will need to take good legal advice first, but I would be leaving well alone.

[erica-65]

That is useful - I have informed my bank and they have given permission but as you say there is a part that says I cannot have DSS tenants!!
My update so far is that the private company that came will charge 10% and manage the let for me. The rent works out the same on a monthly basis after deductions as the LA were offering through their agencies.

[LAP]

Hi Erica,

Most of the genuine guaranteed rent schemes offered by agents are quite a good option however it would of course depend on where your property is. For example we have a contract with a few councils to deliver nightly paid accommodation. This means that we take a contract out with you (so we are your tenant) we then give the property to the council and they house a tenant. The council will then pay us £xx per night that the property is occupied. Either way however you will get paid, same day each month, same amount, regardless of whether the property is occupied or not.

The tenants who go into the property are people who are in receipt of housing befefit, the only difference is that the HB gets paid from the council, to the council. You will; never have contact with the council, as your relationship is not with them, it's with the agent.

As I say this scheme can work very well and if you are smart you can achieve some very good yields.
You would only ever really use this scheme however if the rent you were being offered completely outweighs what the rent would be if you were to let to a private tenant.

I totally disagree when people say "don't go near Council schemes, it's a waste of time, you will get crap tenants and lots of greif" etc etc. It's like me saying that all Milwall fans are racist hooligans. You cannot tar everyone with the same briush. And besides, why be a landlord if your intention is not to financially better yourself? You may as well sell your property and put the money in an interest bearing account.

[erica-65]

As you are clearly an agent for a LA can you tell me how to ensure that only long term family is housedthrough this process?