Investor Rental Protection
Investor Rental Protection (IRP) insurance can protect a portfolio owner’s rental cashflows for a term of up to 25 years.
What is Investor Rental Protection?
Investor Rental Protection (IRP) insurance can protect a portfolio owner’s rental cashflows for a term of up to 25 years. IRP insurance would add value where a portfolio of properties is let on a long-term lease and the portfolio investor (often REIT’s and pension funds) are looking for certainty that the lease payments from the lessee will be met, therefore providing comfort to investors and/or funders.
The IRP policy protects the rental or lease cashflows and provides cover for defaults, voids & counterparty risk. Given the protected term provided by the policy, it is ideally suited to funds seeking long term yields.
The IRP policy can be used for all types of lettings including; private rented sector, supported living or affordable housing sectors.
Policy coverage:
- Protection for defaults, void & operational counterparty risks impacting on the rental cashflows
- Limit of indemnity can be indexed linked to Consumer Price Index or other approved index
- UK real estate only
- Initial term of up to 25 years
- The product is underwritten a ‘A-’ rated UK insurer
Key benefits of using IRP:
- Securitise the funder/investors long term income stream
- Yield compression
- Strengthens property owners’ proposition when raising funds from an investor
- Enhance portfolio sales value with proposed purchasers’ rental incomes guaranteed
- Provides capital efficiency to the funder and the registered providers in accordance with regulatory bodies