We launched our assured rental projects in January 2016 and have purchased 19 assured rental properties so far. The main reason for us focusing on these types of properties wasn’t the great yields, but the fact that they can be relied upon to deliver consistent, predictable returns and I am pleased to say that the situation is pleasantly boring in that they have all performed exactly as forecast, with no loss of rent or maintenance issues eating into our investors’ returns.
The assured rental product is ideal for those who are looking for a long-term, income-producing investment.
For those not familiar with the assured rental product, here are the key facts:
- The properties are let as HMOs to a large corporation (with a government contract) on a five-year assured rental agreement
- The corporate tenant is responsible for all maintenance costs up to £5000 per year
- There are no void periods
- Rent is paid two months in arrears but to date has been paid on time every time
- The properties produce a gross yield of 9-10%
- The average net yield is 8.5%
- The average net return to investors after all costs is 5.6%
- Dividends are paid quarterly
- All properties purchased to date have delivered returns as forecast