Should I rent to Serco for 7 years?

If you’ve had a bad experience, I can understand why Guaranteed Rent (or Rent-to-Rent) sounds attractive, however there’s always pros and cons. Where is the property located out of curiosity? There is significant demand for property so it would be worth fully exploring all options to make sure this really is the best deal.

A SERCO lease is simply a “rent 2 rent” arrangement, but with the understanding that SERCO is a very large national company with huge government contracts. As Judith has already stated, you should read the lease terms very carefully as the sample lease I have seen from them is potentially very onerous on the landlord, e.g. frequency of you having to redecorate, replace kitchens, replace bathrooms, etc.

An alternative option for you may be to lease the property to a local Supported Living (Supported Housing) provider. This may be a charity, CIC, or other not for profit organisation, as they may be able to offer you better terms, e.g. https://www.dropbox.com/scl/fi/9vuqwc8lsv9m26n7xtws5/Private-Sector-Leasing-information-October-2022.docx?rlkey=vt95im8k7ng4d5lwnnpuffagn&dl=0
Disclaimer: my company is this not-for-profit Supported Living provider, (but we only operate in Sheffield, so unless your property is there then there is no vested interest).

As others have stated, I would also look through their Lease/licence/contract extremely carefully. In particular I would be concerned about two things:

Firstly what remains my responsibility? Eg do I still have to do gas, eicr, HMO licencing,repairs and maintenance or are Serco legally responsible for all these things? I would want it to be a completely passive income with no responsibility or I might as well do the lot myself.

Secondly what remedy would I have, if any if Serco stopped paying or the building burned down? They are a massive company with unlimited resources to squash me in the Courts.

In the unlikely event that the two above points are adequately addressed, perhaps with an additional insurance policy against Serco playing up, then I would assume I will receive a smouldering shell back in 7 years. Ie I would need to fit a new bathroom, kitchen and redecorate everything. If the capital appreciation on the property over 7 years will cover the potential refurb and still yield a nice profit plus an adequate passive income for 7 years then maybe it’s worth it.

Get out while you can , l am after 25 years in the prs it’s only going to get even more difficult for landlords, even worse when liebor gain power.

Hi Check out this link

I posted an comment a few days ago and Dan added this link

https://www.property118.com/serco-contract-was-a-train-wreck/

I have heard a few horror stories about serco. They put me off, there are local housing rent to rent. Be careful there too, the one in Preston (Methodist action group) not for profit went bust. Personally I’d sell up

Reply to the comment left by Jan at 15/02/2024 – 09:51
Thanks Jan,
I’m definately rethinking!

Reply to the comment left by Bernard Mealing at 15/02/2024 – 12:27
Thank you so very much for taking the time to respond. This shocking article and comments have helped me decide to say No!!!
Again, Im so grateful for your help.

Reply to the comment left by Andreus at 15/02/2024 – 09:58
Thank you, i do agree with the points youve made but ive judt read the horror story further down in the comments and
It now doesnt feel like a better option than the nightmare Ive been dealing with with “ordinary tenants”
Its so sad that this government has forced this position on us, making many more homeless….but i have to protect my hard earned investments…and sanity!

Reply to the comment left by Bernard Mealing at 15/02/2024 – 12:27
Thank you so much!
This article didnt appear when I searched so I’m extremely grateful that you took the time to help me with my decision…which is now a definite “NO”I .
My sale is nearing completion and am looking at all possible ways to keep this one but Im just not the gambling kind!