The accidental landlord: are guaranteed rental schemes too good to be true?

Victoria Whitlock is tempted by an offer of guaranteed no-hassle rent for five years - except for the small print
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Close your eyes and imagine this: you hand your property over to a management company which not only guarantees to pay you rent — even if the property is empty — but deals directly with the tenants and takes care of all the maintenance.

Best of all, it doesn't cost you a penny. No commission, no fees, nothing. Sounds too good to be true? Well, probably.

A few weeks ago I was contacted by a property management company that offered to rent my flat for 12 months at a fixed price, regardless of whether it found tenants, and also promised to maintain the property.

It would take care of the inventory and check-in and check-out reports and at the end of the lease it would return the flat to me in the same condition its representatives found it.

These guys must think I was born yesterday, was my initial response. Where's the catch? I did some research on the internet and found there are quite a few companies (in London, at least) offering similar "rent guarantee schemes".

It seems they generally sub-let the properties at a premium to local councils or to the Home Office (for asylum seekers, I guess).

On the face of it, such schemes could be a good option for landlords who would like to provide social housing but don't want the hassle and risk associated with tenants on housing benefit, or for landlords who struggle to keep an eye on their properties.

There might be a catch though. My research revealed that these management companies generally pay landlords about 20 per cent below the market rate.

However, I decided to invite one of them round to give me a rental figure for my flat, just for the hell of it, and despite my initial scepticism I was quite impressed with their lettings negotiator. His main concern seemed to be that the property was clean and safe.

Surprisingly, he offered me a rent that was £50 a month more than I'd get on the open market. When I questioned how he was able to offer so much, he said he was confident he could sub-let it for a higher rent to a local authority — they are "desperate" for properties, he said — or to an insurance company to provide emergency housing for policyholders while their own homes are being repaired.

Put your feet up girl, I thought, life's about to get a whole lot easier. I had visions of signing over my property to this company, which was prepared to offer me up to a five-year lease, and not having to think about it again until 2017.

However, on closer examination of the paperwork, I became a little uneasy. For a start, it wasn't 100 per cent clear who would be responsible for the maintenance. The brochure said the management company would pay for any repairs, but the sample lease agreement said it was the landlord's responsibility.

Hmmm… Also, the negotiator said I would receive a deposit of one month's rent (normally I ask for a month and a half ) but the brochure stated only that I would receive a deposit guarantee, which is nothing more than a piece of paper promising to pay up to a month's rent for any malicious damage.

I have other niggling doubts. What if the company was to run off with the rent, leaving the tenant in the property? And what if the tenant was to damage the property and the management company didn't pay up?

I'd love to know if readers have any positive experience of these guaranteed rent schemes, or are they really too good to be true?

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