Landlord with 5 propertiesCheck the figures of the deal
A small landlord with 5 properties in central London contacted us in 2011. He had 1 property with some bad tenants inside that weren’t paying the rent on time and when he tried to give the notice to them they didn’t want to leave the property without a court order.
The landlord contacted several companies specialised in evicting the tenants however it was clear that he’ll be just losing a lot of money during the process. Sognando Ltd was able to step in and found a quick deal with the tenants that saved a lot of money for the landlord.
After dealing with the tenants, Sognando Ltd took over the management of the property and fixed all the damages made by the previous tenants. The apartment went through all the safety checks and was completely refurbished and ready to be marketed in 2 weeks.
The landlord agreed a guaranteed rent and he didn’t have to put forward any money for the major repairs because all the expenses were deducted from the first 6 months of the rent in installments.
The landlord was so satisfied about the results achieved from Sognando ltd that he signed a 3 years lease for the other 4 properties as well.
Now he doesn’t have to be worried about his mortgage payments and guaranteed rent offers you great cash flow and a great return from his investments.
The landlord had a mortgage of 560£ plus a service charge of 110£ a month. So the property was losing him 670£ a month and there was no option for him than investing around 1,000£ for the court case against the tenants so the total loss will be:
- 6 months of rent x 560£ = 3,360£
- 6 months service charge x 110£ = 660£
- solicitor fees = 1,000£
- TOTAL LOST = 5,020£
After the investment of 5,020£ he would have to invest another 3-4,000£ to refurbish the flat before to start again to get any sort of income from the property. Unfortunately this wasn’t an option for him because he couldn’t invest 10,000£ cash and wait up to 8 months before starting to get some of his money back.
Sognando ltd offered him to:
- Find a solution with the tenants. In 2 weeks time they left the property for another more suitable accommodation paid by the landlord for 1st month equal to 500£ (yes sometimes you have to give something)
- As soon as the tenants left the property the works started and were completed in 2 weeks. Sognando ltd gave an interest free loan to the landlord in order to pay for the expenses
- After only 4 weeks the landlord started to receive the guaranteed rent from Sognando ltd.
The guaranteed rent for the 2 bedroom flat was 1,450£ a month. For the first 6 months of the lease Sognando ltd paid a discounted rent of 950£ in order to recover to loan of 3,000£ for the refurbishment of the property.
The landlord had to put only 500£ in advance and immediately after 4 weeks he was receiving 950£ a month that were more than enough to pay his mortgage and the service charge, plus leaving him some profit!
This is what we call a win win solution.
- Client: Own Project
- April 2015