Whilst we know and understand the HMO rental market, many of our clients do not.
To help provide ‘peace of mind’ for them, we offer the option of having St David as the Master Tenant.
This means we are responsible for finding the tenants and all the ongoing costs for the three-year period, and our clients receive a net yield of 7.5% p.a.
Most of our clients live in Asia. They travel frequently and have other commitments to consider. The tenancy and our service are designed to provide hands-off, trouble-free investment for them. One of the benefits of providing it is that it allows us to manage the property more efficiently by quickly deciding on potential tenants, expenditure, etc. rather than waiting for replies from our clients.
Whilst we don’t view master tenancies as a profit centre, we do not expect to lose money on them either. With this in mind, the guaranteed rents are slightly below our expected advertised rents. If the rent achieved is higher, we benefit. If the rent is lower, our clients benefit. The reality is a win-win situation for both parties.
We do not increase the purchase price if our clients take the master tenancy option.
It is offered as a benefit and demonstrates our confidence in the property and our long-term commitment to our clients.