All property owners worry about not getting that rental check in the mail each month. For some, it is critical to making the mortgage loan payment on the property. One way to avoid that worry is with guaranteed rent. It could help to minimize some of the cash flow problems you have when managing your investment property. RentSimple wants you to know what this is and how it fits into your financial goals.
How Does Guaranteed Rent Work?
With guaranteed rent, there are fewer cash-flow problems with owning a property. That’s because the funds can be paid to you if your client stops making payments for some reason. You can then use those funds as you need to, such as to pay your mortgage payment or to cover the necessary repairs and maintenance on that property, especially if the renter left without proper notice. The funds can also help you to cover property taxes or other rental costs you are responsible for month-to-month.
Another way that guaranteed rent can work for you is by shaping your property investment strategy. Once it is in place, you have predictable, reliable income coming in month-to-month. That means you do not have to worry about your investment goals and strategies falling behind. You know that you have the proper amount of cash flow present. This can minimize risk and still allow you to grow your portfolio.
Why is Guaranteed Rent a Good Idea?
Consider, in August of 2020, an estimated 32 percent of Americans were behind on rent or mortgage payments, according to a survey. What would happen if your renter failed to make payment for the month due to job loss or another complication in their life? What would happen to your ability to pay the debts on that property? Guaranteed rent offers a way to avoid that worry. During a economic crisis, collecting rent becomes difficult. Having some type of backup in place can give you peace of mind as a property owner.
How Do You Get Guaranteed Rent Like This?
There are a few ways to help improve your ability to get rent in on time. The best way to do this is to work with RentSimple for help. When you use this type of service, you do not have to worry about making the trip to see your renters. The company does the hard work for you when it comes to collecting rent.
A guaranteed rental program from RentSimple can help make sure you continue to receive rental income from the property even if it becomes vacant unexpectedly. They may also be able to cover the rental income in situations where the renter fails to make payment. This service is available when the management company’s services have rent default insurance. Not all agreements offer this, but it can provide a significant level of protection for you when it is available.
Consider Rent Guaranteed Insurance
Also known as rent default insurance, this is a type of security product that can help ensure you do not have to worry about missing payments from your property when the renter defaults. This is one of the services that can help minimize risks to your business’s growth.
Should You Invest in Guaranteed Rent?
There are numerous benefits to using this type of insurance product. Once you are considering it, contact RentSimple to learn how to get set up. The process does not take long and is a part of the services we offer.
This type of service offers benefits when your renter leaves but also in situations such as the renter:
- Moving unexpectedly
- Abandons the property for some reason
- Loses their job
- Becomes ill or injured, resulting in disability
- Gets divorced
Managing these lifestyle changes with your renters is hard to do in every situation. You may have no idea there are risks involved when you rent to the individuals. They may have all of the qualifications for a reliable renter, but things happen to them. With this type of insurance, those risks do not have to impact your flow of income. For those who depend on these funds for their own income or to pay off their mortgage on the property, having guaranteed rent simply makes sense.
At RentSimple, we encourage you to learn as much as you can about the opportunities to minimize risks within your organization. Rent default insurance is one of the core tools you can use to breathe a bit easier month-after-month even as your renters change or have problems with making payment. If you are unsure whether this is an investment that is right for your needs, call your Ashburn property management company to learn more.