A new rental option for landlords could see them receiving an upfront annual lump sum of over £10,000.
The Advanced Rent Option - being offered through Choices Estate Agents and its associated brands Sinclair Hammelton and Daniels Property Services - works like this.
It provides landlords with a lump sum of up to 12 months' rent in advance, less the equivalent of standard letting agency fees, new tenancy set-up fees, an emergency maintenance float and optional rent guarantee.
It’s open to any buy to let landlord, subject to referencing.
Choices says that based on a property with a rental price of £1,200 per month, landlords could receive an upfront lump sum of £10,231 by signing up to the ARO.
This final figure is calculated by discounting standard annual agent fees costs of £2,592, new tenancy setup fees of £395, a rent guarantee of £432 and an emergency maintenance float of £750 from the total annual rent of £14,400.
If a landlord wants to operate the ARO but already has a tenant in-situ, they can instruct Choices or any of their associated brands to carry out background checks and re-reference the tenant, before signing an agreement with the agency. Alternatively, Choices or its partners can manage properties with sitting tenants until the tenancy is over, before implementing the ARO for a new tenancy.
Because the ARO is that it is not a loan it does not depend on a landlord’s credit rating and there is no extra paperwork to complete.
“The ARO provides landlords with a great opportunity to improve their cashflow. Rental market conditions have been tricky for some time now and we want to provide landlords with a straight-forward way to wrestle back control of their finances” says Simon Shinerock, owner of Choices Estate Agents.
“The cost of letting a property is likely to keep on rising, while the private rented sector will only become more regulated. With this in mind, landlords can benefit from receiving their rent upfront and start planning their future investment strategy accordingly.”
The ARO is being launched formally next Wednesday, August 28, at an event from 6.30pm to 9.30pm at London’s Royal Institution of Great Britain.
The event is being hosted by industry commentator Christopher Watkin and amongst the contributors will be Charlie Bryant, managing director of Zoopla.
The ARO launch event is being hosted by Angels Media, the publisher of Letting Agent Today and the industry’s other Today titles. To register to attend, please click here.