17:40 PM, 8th July 2013, About 10 years ago 4
Referencing services for landlords come in several varieties and with numerous options and price structures.
You can get anything from a credit check for a fiver through to full referencing which guarantees rent on the due date if your prospective tenants and guarantors are considered to be a good risk.
The larger referencing companies have been around for several decades and are used by literally thousands of letting agents across the UK. They have, therefore, also developed huge databases over the years of bad payers, anti social tenants and tenants who have caused wilful damage to landlords properties.
If you are offered referencing for under £10, chances are that you will get what you pay for which at best could be described as an indicative report only. A company which previously provided lifestyle referencing free of charge now only offer this service when combined with a £4.99 credit check for example.
The advice from Property118 is to pay slightly extra and buy the real thing. If you are heavily reliant on your rental income and could not afford the legal costs associated with evicting a bad tenant we also recommend you to purchase rent guarantee insurance. The entire package is generally available for less than £100 a year. Do check the small print on RGI policies though as your claim might not be valid unless you follow time sensitive claims processes.
As of next month (August 2013), a new service will be launched into the market for complete peace of mind. It is a rent collection product with a difference; in that rent is paid to the landlord on the due date whether it has been collected or not. The company offering the product is new to the market but the scheme is underwritten by FCC Paragon, established in 1996 and regarded by many in the PRS as one of the UK’s most established referencing companies. The legal services for possession are outsourced to Landlord Action. Rent continues to be paid on the due date until such time as possession is recovered, all at the expense of the underwriters. This scheme will be competitively priced at just 5% of rental income when it is launched towards the end of August 2013. It’s an ideal half way house in terms of pricing between self management and full property management, however, the major benefit is the certainty of cashflow. For more details see LettingAgentsOnline.co.uk
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