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Tenant referencing has now evolved to the extent that insurance companies are prepared to underwrite the risks associated with the financing of Advanced Rent payments, allowing landlords to secure payment of up to six months rent up front. The insurance company underwrites the entire cost of the Advanced Rent and collection of monthly rent payments from the tenant.
Agents paying landlords 6 months rent up front to secure new business > property118.com/?p=33322proper…< UPDATE – see my review blog of Advanced Rent
— Mark Alexander (@iAmALandlord) November 2, 2012
There are certain steps all good landlords should take when vetting tenants. The essentials are credit referencing, previous landlord and employers’ reference and the use of a guarantor where appropriate. Prudent landlords also request copy bank statements as reassurance of responsible financial behaviour as well as visiting the prospective tenants wherever possible in their current home to get a better idea of how they live, particularly if they are pet owners.
An additional strategy may involve the use of an insurance policy, known as RGI or Rent Guarantee Insurance, to insure against rent arrears and the costs associated with re-gaining possession in the event of tenants defaulting on rent payments. This is very popular amongst smaller landlords who are reliant on rental income to pay their mortgages.
However, an innovative new product, run by a team of seasoned property professionals who are regulated by the FSA, has taken the rent guarantee concept to another level. Not only does Advanced Rent Limited underwrite the risks outlined above, they also pay out six months of Advance Rent to the landlord at the commencement of the contract. For landlords who require complete peace of mind and absolute certainty in terms of knowing that rent will be paid this scheme certainly looks to provide absolute security. Advanced Rent Limited does exactly what the company name implies, furthermore, the scheme also includes 24/7 emergency call out cover.
The Advanced Rent model, which is up for an award at the Landlord and Letting awards for innovation, is designed to appeal to busy property investors who may not have the necessary skill set, time or inclination to monitor and manage rent collection.
For obvious reasons, terms and conditions apply as Advanced Rent Limited need to satisfy themselves that any arrangements are appropriate for the risk associated with underwriting Advanced Rent. Nevertheless, it would appear that the facility is incredibly simple to set up. We have seen testimonials from existing users of the scheme where they submitted details and received a phone call from the Advanced Rent team within minutes – and the advanced rent was in their account within 24 hours.
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