Buy-to-let landlords and property investors are being offered the opportunity to receive their year’s rent in advance in one lump sum.
Known as the Advanced Rent Option (ARO), the scheme is being offered through Choices Estate Agents and its associated brands using its Primary Tenancy service.
The initiative, believed to be an industry first, sees landlords paid upfront and in advance even though Choices is collecting rent on a monthly basis.
It provides investors with a lump sum to manage buy-to-let mortgage payments or expand their property portfolio.
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.
If landlords already have a tenant in-situ and want to take up the ARO offer, they can instruct Choices to carry out some background checks and re-reference the tenant, before signing an agreement with the agency.
Alternatively, Choices can manage properties with sitting tenants until the tenancy is over, before implementing the ARO for a new tenancy.
The Advanced Rent Option is not a loan, which means it does not depend on a landlord’s credit rating and there is no complicated extra paperwork to complete.
“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,” says Simon Shinerock, owner of Choices Estate Agents.
“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.”
He says that ‘shrewd’ investors will be aware that due to challenging market conditions, now is a good time to purchase property, but that finding the capital to do so is not always ‘easy’.
“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.”
“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,” says Shinerock.
Choices is a nine-branch sales, lettings and investment agency which covers the South East of England and was founded in 1989.
To mark ARO’s official launch on Wednesday August 28th, an exclusive nationwide launch event, hosted by Choices and Angels Media, will take place at the Royal Institution of Great Britain.
