Our guaranteed rental scheme has benefited a number of Cardiff & South Wales property owners with negative equity.
This case study highlights how a young Cardiff couple with help from our guaranteed rental scheme were able to move up the property ladder while keeping their existing property.
We were contacted by a professional couple in 2011 that had a 2 bedroom house located in the Pontcanna area of Cardiff. The property was in negative equity, but they had recently inherited money and had agreed the purchase on their forever home at a bargain price.
Their plan was simple, to purchase their dream home at what they perceived a bargain price while rent out their existing home which was in negative equity and wait for house prices to recover to release equity or dispose of the property.
The couple had no experience of being a landlord, finding tenants or property management experience, and coupled with the added financial burden of a second larger mortgage wanted the security of a guaranteed rental scheme, with no void periods or tenant hassle.
The couple had invited several local Cardiff lettings agents to provide a rental appraisal so had a clear understanding of the rental market and the rental income their property could achieve so were pleasantly surprised when we provided them with a competitive guaranteed rental income to be paid on the same day of each month, with no set up costs, tenant finder’s fees or management fees.
Guaranteed Rental Scheme Process
As the Cardiff property in Pontcanna was on a residential mortgage we advised our client to obtain permission to let as well as advising them to obtain landlords insurance, a Gas Safety Certificate and an Energy Performance Certificate (EPC).
Once all the required documentation was in place a commercial contract for our guaranteed rental scheme was signed by both parties, highlighting any circumstances which may result in a breach of contract by either party, the responsibilities of both parties as well as the amount of guaranteed rent and the date on which it will paid each month.
Once the coupled has a confirmed completion date on their house purchase a date was agreed for when our guaranteed rental scheme would commence. In the mean time we actively marketed our client’s property on major internet portals such as Rightmove and Zoopla, conducted viewings and fully referenced suitable tenants including credit check, employment references and previous landlord’s references at no cost to our client.
Prior to our client handing over the keys to their house a detailed inventory was carried out including photographs with our client present, to ensure they were 100% happy with the condition of the property at the beginning of the Guaranteed Rental Scheme and also at the end of the process before the property was handed back to them with vacant possession.
The tenant selected was an anaesthetist working on a 2 years secondment at the University Hospital Wales and was provided with a 6 month Assured Shorthold Tenancy (AST) agreement, once again a detailed inventory was conducted, a deposit was taken and logged with The Deposit Protection Service (www.depositprotection.com) and Prescribed Information and Terms of Business of The DPS all served within the required 30 day period therefore insuring both our Guaranteed Rental Scheme and our landlord client is legally compliant.
If you would like to find out more about our Guaranteed Rental Scheme please complete the form below to receive a call from one of the team: