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TODAY'S OTHER NEWS

Rental option gives landlords average £10k-plus lump sum

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.

  • icon

    What Landlord in their Right mind is going to fall for that ?

  • Paul Barrett

    TThere are unfortunately a lot of Dopey LL out there!!
    I simply DON'T know where to start as to how useless this scheme is!!
    All a LL needs is RGI on a guarantor or the tenants.
    LL can self-manage and retain the profits.

  • Simon Shinerock

    I genuinely don’t understand what you are talking about either of you, fall for what exactly? Fall for being paid a full years rent up front minus standard Lettings agency fees and being able to make use of the money for whatever they like, your comments make no sense

  • icon

    What an absolute load of rubbish. Only ever need a LA to secure a tenant no way in a million years would i part with more than the finders fee. £250 max.
    I dont like advance rents unless from foreign students with no UK guarantor. Otherwise rather have rent monthly and no whats coming in and going out month on month.

  • Simon Shinerock

    Ahh I see, you don’t like paying agency fees full stop. That’s fine but for the ones who use agents (and who are you to say they are wrong) having the option of getting the rent upfront is pretty attractive compared to not having the option :) you do realise this is Lettings Agent Today right? By the way, our event is totally oversubscribed so I guess the people have spoken :)

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