Protect yourself effectively against non-paying tenants. Guaranteed rent resolves every problem and uncertainty
For a year now, we have lived in a society with a range of restrictions, sometimes stricter and sometimes more lenient depending on the current pandemic situation. One thing is certain: measures to prevent the spread of coronavirus have drastically affected the functioning of the economy, businesses, sole traders and households. After prolonged lockdowns, many people are facing financial difficulties, often concerning their basic livelihood and worries about how to pay rent, childcare and household expenses. The situation is not easy for landlords either – if finding a creditworthy and reliable tenant was not easy before the pandemic, it is now an even tougher challenge. The guaranteed rent service offers a helping hand to owners of investment properties.
While the pandemic has not affected property prices, it has deepened the current housing crisis. With the arrival of nationwide quarantine and several lockdowns, many people who had previously been reliable and financially secure found themselves without income, or with substantially lower income, and consequently lost the ability to pay rent and mortgages regularly.
“Many tenants find themselves running out of money precisely because of official government regulations. Some have been ordered to cease trading, others are struggling with a dramatic drop in demand, and some are dealing with job losses. Rent is a significant item in the family budget, so it is no surprise that, in the current crisis, they find themselves on the brink of serious financial hardship. It is becoming clear that coronavirus will be with us for some time yet – the idea that it will be eradicated and everything will return to normal is misguided. It is therefore better to adapt to the situation and protect yourself in every possible way, so that as a landlord you have a secure flow of rental income. Especially if you depend on it, for example to repay a mortgage,” advises David Novotný, owner and managing director of the real estate company Bohemian Estates, which has professionally focused on the purchase, management and sale of properties, including development, for over ten years.
In addition to protecting yourself against the risks of this business, as the owner of an investment property you can also simply increase the value of the property you let and achieve even greater appreciation. “With the Guaranteed Rent service, the value can increase by up to several per cent, depending on many aspects that a professional rental manager can improve. The service is intended for anyone who wants to receive regular rent every month without having to worry about anything. We particularly recommend it to owners who bought their flat with a mortgage and do not want to run into difficulties when the flat is vacant or when the tenant becomes unable to pay,” explains Novotný.
How does it work in practice? “We lease the property from you, find a reliable tenant and check that they have no outstanding debts. We enter into a sublease agreement with the subtenant and pay you the agreed rent, even if the property is unoccupied or the subtenants fail to pay. Once the lease ends, we guarantee that the property will be handed back in perfect condition. And how do we determine the rent? Following an inspection, we establish the market rent and deduct approximately 15% excluding fees; this is the rent we guarantee to you once the terms have been agreed,” concludes David Novotný.