These guaranteed rental income schemes are popping up everywhere…
Whilst you may be dead against them, you may also come up against a situation where you are looking to buy a new BTL, you find the perfect property. Tenants in situ. Paying a great rent.
So you ask for more details, rubbing your eyes at this dream situation and realise…
‘Wait, what? It’s a leasing company who are ‘guaranteed rent providers’ who are actually the tenant!’
Firstly don’t panic.
You’ve got options:
Firstly, check who the guaranteed rental income providers are.
Go to their website, check out their privacy policy and get the actual company name.
Then search for their company accounts on Companies House. How much money did they make over the last 12 months. Enough to pay your rent plus maintain your property or pennies which wouldn’t cover much.
Again, no need to freak out right now if it’s the latter. You then need to check if there is a deposit in place for your prospective property (this should cover the notice period) and even better a director of the companies personal guarantee. If either or both of those are in place, you should be Ok, just proceed with caution, get your solicitor to check it out and put landlords insurance in place.
If the accounts are terrible… for example only have £16,125 in the account and owe circa £110k, there’s no deposit or guarantor and you can’t get them out. Probably best to walk away… otherwise you could have a Dream Lodge Group on your hands.
There you have it!
Proceed with caution in this situation because their are many sharks who only operate on their own get rich quick basis. Don’t get caught up in it if it looks dodgy… there’s a reason the current owners are getting rid!
Have you been involved in one of these schemes? Let me know below!
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Natasha
