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馃數 What Is A Rental Guarantee And Are They Ever Worthwhile? - YouTube
Channel: Property Investments UK
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- property investment UK and in today's
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video we look at how rental guarantees
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can work with investment properties
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specifically service accommodation and
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how strong are they what you should kind
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of consider and look for when it comes
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to rental guarantees
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now the beauty about property investment
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is there's a load of different options
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load the constructor you can kind of
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consider everything from a strength or
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with another bike allow all the way
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through to even a hotel investment or
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care home HMOs and also service
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accommodation and some of those models
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come with rental guarantees but there's
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some imposed misconception about what
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guarantees offer and what they cover and
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also who's actually paying for them is
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it insurance product is it the developer
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is guaranteeing it or is it a letting
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agent effectively that's kind of
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underwriting that going Janus is very
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different and reasons as to why some of
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them are valuable or something kind of
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odd as well I think before like but from
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you guys obviously because you have a
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letting backgrounds you look at
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guarantee to a slightly different aspect
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I think than what a developer might do
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yeah we've looked at sites before like
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some developments and stuff kind of see
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behind us now like a resale agent might
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be selling anything like a one-bedroom
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property you can bind the developers
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underwrite in a guarantee for the next
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three years that's great but sometimes
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that guarantee is because that when
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you're buying the property is paying us
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like premium and you're ultimately
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covering that risk element yeah because
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the developers selling that property but
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especially lettings point of view you
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guys are very different because you're
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undressing the currencies if you know
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you're going to do that in property that
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you know effectively going to let yeah
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well that's the idea yeah it's a yeah I
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mean obviously there are lots of
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products you know whether it's biotech
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with a rental guarantee or you know the
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purpose-built you know a rental ground
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to you know a lot of conception is that
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you know it is priced into it or you
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know what they're making out how can
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they do this etc how is it guaranteed
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yet and yes of course in theory some of
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them points are correct you know it can
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be and you've also got to make sure that
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the rental guarantee justifies that once
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a rental guarantee ends that is a true
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reflection of the rental you're going to
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get yeah the last thing you want us to
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be told on a bias that we stood against
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six or 10% of them find out that after
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that currently runs out you're actually
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on five or six percent you know with so
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that they morally the headline figure is
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will give you a guaranteed renders these
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said seven percent but then the local
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it doesn't actually sustain that like
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that now absolutely so you know it was
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good for the time being and if any is
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reason the developer or the management
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guarantee anything happens to those then
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yeah you lose your guarantee and because
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that's who is with them and I suppose
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for men that would be the same but what
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we base it on is that the prices of the
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prices it was you know the price is not
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included in the guarantee the guarantees
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not mentioned anywhere with any of these
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sort contracts to do with personal
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property so you get to consider that as
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an asset on its own yes yes that price
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about as priced as it was local market
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meant Durkin and you just yeah there's
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not 18 percent on top because we are to
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incorporate some metal guarantees yeah
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we best our rental guarantees on our
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experience on what we can achieve and
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what we've done in the areas and what we
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have been told we can achieve so we will
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then put in you know certainly not over
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exuberant but you know a fair rental
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guarantee and so that we know that we we
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expect based on the percentage of the
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occupants of the remodel the occupant
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we're running on that we can achieve X
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percent is based on seventy percent
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occupancy if that's the case you know we
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want to make a little bit out of it
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obviously
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we compare these bills and we can offer
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that rental guarantee of sixty percent
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and that will come from ourselves
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directly yeah every month so it's based
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on knowledge and it's based on
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expectations of what we are told we can
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achieve our suppliers are willing to pay
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a tetra so it's not anything to do with
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the price of the property yes just based
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on what we expect on return so it is
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very different it
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I guess it's based on facts yes not just
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on yeah he's a paper and I think that is
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that's important because if you're if
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you're trying to analyze that be like
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sometimes you can look at property deals
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and then compare apples for apples and
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the guarantee might swing get overly in
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one way or another but if you don't know
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where that guarantee is coming from and
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how its underwritten whether it's
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developer showings product or the Latin
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agent then you might get misconception
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as to what ideal really looks like and
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you want to think of it long twitting
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that what every relationship mentor we
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want it to be a long-term relationship
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you know on a suppose if we wanted to go
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down the route of flour in it or
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Possible's would say that will give you
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eight percent rental guarantee and look
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after everything and
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it looks an incredible deal but there's
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no point I was offering 80% and paying
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our cost and not making it work yeah you
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know because that's not good for anyone
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at the end of the day so what we all do
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we'll say it will do will generally
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always be above that's one thing rule
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guarantee that if you enter the normal
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astein you got the normal market way
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after all your costs it will be above
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that you know man not be a bit by a
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great deal but it will be above that and
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that tech tell you risks and voice out
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yet you know it takes all the hassle out
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for you takes everything out you are
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literally getting a guarantee for doing
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nothing at the end of the day but we do
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we base it on the knowledge that we have
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in the experience that we have with you
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again is probably going back to all the
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reasons why everyone can't do it because
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we did it in the revenue share that is
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risk reward but we also know that works
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but we do offer people a table yeah and
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I think here because then if I can't do
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it because they don't necessarily have
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the systems in place to user a backup
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that guarantee and so they can offer a
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county model we're living on the price
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and they maybe sell it it's like premium
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but if it's coming from I think the less
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engaging that the guarantees is based on
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what the rental market is exactly with
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the lectin agent if a developer gave a
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normal guarantee or let's know if you
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had normal going to explain I said
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before they'll probably give me some to
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5% of what they're nor they can achieve
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yeah that will cover themselves more
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words so let's say let's say a flat will
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be 5% net you would achieve yet after
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all cost
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they were probably good for ship as a
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rental guarantee or below market rent
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but it's guaranteed through the service
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model because we can charge the higher
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race and that you know the higher weekly
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monthly rates we usually a percent above
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yes so it's a win-win for everyone
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really
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so that's why guarantees then our
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comment when it comes to kind of
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property investment depends on this the
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strategy development you're kind of
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looking at you will get some rental
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guarantees off the good products but and
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might be for the developer might return
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insurance product or it might be from
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the mean
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laughing aging and it's just acacia
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trying to understand the context who's
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offering it what is the reality is like
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how strongly back guaranteed back felt
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but also from the point of view is as
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Paul so really when when that rental
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ends what is the local market will it
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sustain that type of rental tenant
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profile rental income all that kind of
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good stuff so it's a couple things to
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kind of consider that I hope you have to
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do some background as to how rental
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guarantees can kind of work on your
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investment projects properties and also
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from point of view service accommodation
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thank you for watching this video if you
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