How does the idea of 12 months’ rent in advance sound? Choices Estate Agents plans to launch a new Advanced Rent Option (ARO) product, which allows landlords to receive their annual rent upfront in one lump sum.
The initiative, believed to be an industry first, will be officially launched to landlords and lettings professionals at an exclusive event at the Royal Institution of Great Britain on Wednesday 28th August.
The scheme, which sees landlords paid upfront and in advance even though the agency is collecting rent on a monthly basis, provides investors with a lump sum to manage buy-to-let mortgage payments or expand their property portfolio.
Simon Shinerock, owner of Choices Estate Agents, which covers the South East of England, commented: “We’re offering landlords a fantastic opportunity to receive their annual rent upfront for the year. Using this money, landlords could expand their portfolios or make a luxury purchase such as a car or holiday.
“We want to provide landlords with more financial freedom, while at the same time ensuring they have the protection and peace of mind they require by letting through a trusted high street agency.”
Subject to referencing, ARO can provide landlords with up to 12 months' rent in advance, minus standard letting agency fees.
For example, based on a property with a monthly rental of £1,200 per month, landlords could receive an upfront lump sum of £10,231 by signing up to 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.
Shinerock continued: “All shrewd investors know that during a market lull is the time to pick up a bargain before the next period of growth.
“However, finding the capital to do so is not always easy. That's why we want to help landlords to take advantage of favourable investment conditions by using the annual rent from their existing properties to purchase their next one.
“It's clear that in the face of rising costs and increased legislation, the rental market makeup is moving away from accidental and part-time landlords and shifting towards professional investors with large portfolios.
“The ARO can help landlords to take their next step in the market and start on the path to creating their very own property empire.”