RENTAL GUARANTEE

The number one reason investors hesitate about their first investment property is most often uncertainty about rental vacancies and the effect this can have on future cash flow. What if we don’t get a tenant in time?  What if we don’t get the rent we need? What happens when the tenant moves out? What if my property manager is not doing the best job? Who helps me when these things happen?
 
The answer is, My Rental Assurance – A combination of rental guarantees and professional assistance to oversee your property management. The best part is that when structured properly (as recommended by your accountant) the Tax Man pays it for you. The actual ‘after-tax’ cost per week for most clients is between $0/wk & $2/wk.

My Rental Assurance

  1. Limits your initial vacancy to 6 weeks
  2. Limits your annual vacancy to 3 weeks between tenants
  3. Limits your minimum rental income to that set by your property manager at time of handover and reviewed annually
  4. Provides an experienced team of Real Estate Professionals to oversee your property management
  5. Lasts for 5 years

Since its introduction, My Rental Assurance (MRA) has been enthusiastically embraced by clients – a clear indication there was a need for this type of peace of minds for our clients

 

Peace of Mind service

Your My Rental Assurance is designed to give you peace of mind at the taxman’s expense by guaranteeing the rental income of your investment property if average rental vacancy is exceeded and the market rental amountat the time of handover is not achieved.

 

Following Settlement

Newly built properties will take an average of 6 to 8 weeks to rent out.

We are not the only organisations to recognise that clients wish to minimise their exposure to the risk of long periods of time without rental income to offset their investment property mortgage payments. As examples, Defence Housing Authority offer a 10 year lease and Ozinvest offer a 10 year rental guarantee (both forms of rental assurance), and a major independent real estate manager in Brisbane offers a five year rental guarantee.

  1. The DHA rental guarantee costs clients about 7% of their rent, or about $25/wk before tax benefit = $17/wk net.
  2. The Ozinvest scheme costs clients around $15/wk before their tax benefit = $10/wk net.
  3. The Brisbane Independent Property Manager offering his own scheme has the set charge at 5% of rental income, which equates to around $18/wk before tax benefit = $12/wk net.
  4. Our My Rental Assurance is not paid out of rental income, it is funded using a totally different model designed to minimise the cost to the clients. This means it costs clients around $0-2/wk net – vastly better than anything else on the market ($12-17/wk) for effectively the same for peace of mind.

 

Annual Vacancy

An investment property averages 3 weeks vacancy per annum between tenancies.

A rental appraisal is based on current market conditions within your investment area and reviewed annually.

 

Protecting yourself against these costs

What if you could guarantee yourself this would never happen? What if the tax man would pay for that guarantee for you?

 

Our My Rental Assurance is designed to give you this peace of mind.

5 year peace of mind service

MRA PAY THE RENT
  • 6 weeks after handover if you don’t have a tenant.
  • If your property is vacant more than the average 3 weeks between tenancies per year.
  • If market rent set by your property manager at the time of handover and yearly review is not achieved, MRA pay the shortfall ensuring all the appropriate documentation is completed and the property is ready to be tenanted.
My Rental Assurance
  • The Property
  • The Market Rent
  • The Property Manager

You need to

  • Authorise to pay your MRA service at or before handover.
  • Notify MRA or their agent of any unexpected vacancy 3 weeks prior to the lease expiry.
  • Give MRA or their agent authority to act on your behalf in negotiating with your property manager and potential tenants to minimise vacancy and maximise rental.
  • The property must be advertised for rent online, a minimum of 3 weeks prior to a tenant vacating. 
  • Allow MRA to offer incentives such as discounts, rent free periods etc on your behalf to rent the property. If the incentive reduces your income below what has been agreed, MRA make up the difference.
  • Not have your property on the market for sale whilst trying to rent out.

My Rental Assurance is attached to your investment property, should you sell your property the remaining time left on the My Rental Assurance will be transferred to the new owner. You will be obligated to advise the new owner that they must inform My Property House within 30 days of their contact details. Should My Property House receive no notification of the sale or the new owners contact details the remaining term of the My Rental Assurance will be forfeited.

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