SleekTech LTD

When letting out properties to councils, housing associations, or similar entities, property managers can choose between two distinct approaches: Guaranteed Rent or Higher Rent. Each approach has its unique operational and financial implications, and the choice depends on your agreement with the property owner.

Here's a detailed breakdown of both approaches and how they work within SleekTech Property Management Software. 

1. Guaranteed Rent Approach

Important Note:

You should only use the Guaranteed Rent approach if you commit to paying the property owner consistently, even when the property is vacant.

Overview:

With the Guaranteed Rent approach, you consistently pay the property owner a fixed rent every month, regardless of whether the property is occupied or vacant. This provides the owner with financial stability and removes their concern about tenancy gaps.

How It Works:

• Setup in SleekTech: Enable Guaranteed Rent for the property on its Property Page. This is managed under the Guaranteed Rent section.
• Guaranteed Rent Credits: The system will automatically generate a Guaranteed Rent credit from your company to the property owner. This credit will appear on owner statements as a monthly payment, even if the property is unoccupied.
• Tenancy Management:
  • When you create a tenancy for a property under this approach, the council (or other entity) pays the rent to your company, not directly to the property owner.
  • The income from tenants is recorded as Manager Income, and it does not reflect on the owner's statements.
  • You can terminate and create new tenancies as councils or housing associations bring in new tenants. The software can also handle rent calculations on a nightly basis, which is typical in council arrangements.
• Reporting: Owner statements will only show the Guaranteed Rent credit. Actual rent collected from the tenants will appear when generating Manager Statements.

Benefits:

• Consistent monthly payments to the property owner.
• Simplified management of council tenancies and rents.
• Clear separation of income for the manager and the owner.

For detailed instructions how to set up guaranteed rent see here:

Guaranteed Rent

2. Higher Rent Approach

Overview:

With the Higher Rent approach, you pay the property owner only a portion of the rent you receive from the council or housing association. This often allows you to retain a larger share of the income, as councils typically pay higher rates for properties.

How It Works:

• Setup in SleekTech:
  • Do not enable the Guaranteed Rent option on the Property Page.
  • On the tenancy form, input the Higher Rent amount that you receive from the council or housing association.
• Additional Fees: You can create an additional fee based on the base rent rate if required, allowing you to account for extra income from the council's higher payment rate.
• Owner Statements:
  • The owner will see only the base rate rent, minus any applicable commissions, on their statements.
  • Higher Rent details can be hidden from the owner on the statement template (contact our support team to configure this setting).
• Reporting:
  • Your company retains the difference between the Higher Rent and the base rate as additional income.
  • This setup is ideal if you negotiate significantly higher rates from councils and want to maximize returns.

Benefits:

• Maximizes income from council tenancies.
• Flexibility to structure rents and fees as per council agreements.
• Owner statements remain streamlined, showing only the agreed base rent.

For detailed instructions how to set up Higher rent see here:

Higher Rent

Choosing the Right Approach

The decision between Guaranteed Rent and Higher Rent depends on the type of agreement you have with the property owner and your financial strategy: