Every landlord who calls us asks the same question in the first two minutes: why would I take less than market rent? It is a fair question, and the honest answer is that you usually do not, once the year is counted properly.
The headline figure is not the income
Say a three-bedroom house lets at £2,100 a month through a high street agent. That is the number on the listing. Now take out a month of void between tenancies, roughly £2,100. Take out management at ten per cent plus VAT, around £3,000 over the year. Take out a tenant find fee on the re-let, often another £1,000 or more. Add a fortnight of rent lost while works are done between tenancies.
The £25,200 headline is closer to £18,500 in the account, and that assumes nobody falls into arrears.
What guaranteed rent changes
A guaranteed figure of £1,700 on the same house pays £20,400 a year, every year, with no fees deducted and no void risk. It is a lower headline and a higher income, which is counterintuitive until you have run the year out on paper.
When a managed letting is the better answer
There are cases where it is. If your property is in a premium central postcode, in excellent condition, and you are comfortable carrying void and arrears risk yourself, the market-rent route can out-earn a guaranteed figure. That is why we quote both and let the numbers argue it out.
The part nobody prices
The other half of the decision is not financial. Under a guaranteed agreement you are not the person who takes the call about a boiler on a Sunday, and you are not the person chasing rent that is eleven days late. For a lot of owners, that is worth more than the difference in the figures.
Get both figures for your property
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