Guaranteed Rent or HMO Management, Which One Is Right For You?
Here we look at the differences between Guaranteed Rent and HMO Management. During 2020, the Pandemic has hit the London room rental market, very hard, making a lot of landlords have to change their strategy.
Both strategies have excellant work ability if executed right.
HMO MANAGEMENT:
This service incorporates a full management service, whereby we rent your rooms individually and thus ensure that you get the maximum rental for your property.
The HMO Management Service is chargeable at 15% INC VAT per calendar month of Gross Rent, whereby, 5% is collected on the rental of each individual room and the remaining 10% is chargeable once all rooms are rented, with the initial 10% coming from the revenue of the final rented room.
Please note that we work with a minimum tenancy of six months at a time, we do not accept less than this.
This service DOES NOT give you guaranteed rental, but it will generate the maximum NET rental for you.
The HMO Management service entails the following:
| ✔ | Right Room only get paid our management fee once all rooms are full |
| ✔ | Fully managed and rent collection |
| ✔ | Advise and deal with deposits |
| ✔ | Three - five year management contract |
| ✔ | Take care of all maintenance works at cost price or with your recommended contractors |
| ✔ | Do all viewings on available rooms |
| ✔ | Quarterly video report inspections |
| ✔ | Assign and undertake all bills |
| ✔ | This strategy works extremely well on Three Bed + properties and has proven to be pandemic proof, giving landlords market beating returns. |
Guaranteed Rent:
Right Room effectively becomes your tenant, guaranteeing you a fixed annual rental income regardless of whether the property is empty or the tenant stops paying. We then let the rooms individually, taking great care to select the right kind of tenants because if they stop paying, leave suddenly or damage the property we take the financial hit rather than you.
We only house working professionals who can provide proof of employment; it’s our guarantee to you. When we sub-let the property we take the normal deposit from the tenant, which is then registered with one of the approved deposit protection services. When the tenant checks out, the deposit is used to cover the cost of damages that might have been incurred.
As well as this, we guarantee a monthly visit to each one of our properties to ensure everything is in order. Any problems that occur within our tenancy, that are outside the remit of our pre-agreed parameters, we promise to resolve.
- No fees/commissions
- Full property management, with no hassle for you.
- We add value to your property and identify any HMO compliance needs to get the property fully licensed and compliant.
- All tenant deposits will be placed into an approved deposit protection scheme, insuring all mishaps or damages that are liable to the tenant.
| Traditional Let Only | Traditional Let and Managed | Right Room - Guaranteed Rent | |
|---|---|---|---|
| Marketing Your Property | ✔ | ✔ | ✔ |
| Tenant Find | ✔ | ✔ | ✔ |
| Regular Property Inspection | ✖ | ✔ | ✔ |
| Maintenance & Repair Calls | ✖ | ✔ | ✔ |
| Income During Voids | ✖ | ✖ | ✔ |
| Based on a Two/Three bed with an advertised rent of £1600pcm | Traditional Let Only | Traditional Let and Managed | Right Room - Guaranteed Rent |
|---|---|---|---|
| Rental Value PCM | £1,600 | £1,600 | £1,600 |
| Rental Value Per Annum | £19,200 | £19,200 | £19,200 |
| Typical Voids at One Month | £1,600 | £1,600 | £0 |
| Tenant Find at 10% | £1,920 | £1,920 | £0 |
| Property Management at 12% | £0 | £960 | £0 |
| Net Income PCM | £1,440 | £1,360 | £1,600 |
| Net Income Per Annum | £17,280 | £16,320 | £19,200 |
What would you prefer?
