Key risks

Responsible lending.

The way you arrange your finances requires careful consideration, and it’s important that you have the information available to make an informed decision. We believe in being as transparent as possible but we cannot provide you with any financial advice.

Though we have designed Reap to be a lower-risk income product, the price and value of property and the income derived from it fluctuates: you may not realise the amount originally loaned. Your investment is at risk and is not covered by any financial services compensation scheme. Past performance is no guarantee of future performance.

  • Is Reap dependant on property values increasing?

    No, Reap is not dependant on property values increasing. Predicting the risk and likelihood of a future house price crash or boom is without certainty, but a short-term drop in house prices would not negatively impact on the loan arrangement.
    Our properties maintain strong values due to their size, type, location, pricing and condition, but the value of property can go down as well as up. However, even in the unlikely scenario that over the next 5 years property values were to drop in price by up to 25% your original Reap allocation would remain unaffected; the original loan amount would still be repaid to you in full.

  • What happens if there are rental void periods?

    Your income is unaffected. Nearly all landlords will experience periods when their property is not rented out to tenants – this is called a ‘void’. Renters unexpectedly move jobs and choose to live elsewhere for all sorts of other reasons.
    We have an extremely low tenant turnover and, over the past 5 years, 96% of our properties have been re-let to new tenants within 14 days, the majority within less than a week.

  • Will I still receive my income if the tenant is in rent arrears?

    Yes, you will still receive your income. Even if a tenant defaults on their rent, our in-house legal team will act swiftly to resolve the issue.
    We also ensure that every property is protected with rent guarantee insurance to cover any rent arrears. In general terms, the risk is relatively small due to the fact that we reference tenants prior to signing a short term tenancy agreement.

  • What if a tenant damages the property? Will I have to pay?

    No, this is all accounted for in our model. Unfortunately some tenants don’t care for a landlord’s property in the same way in which the homeowner does; it is not their own and they will be moving on at some point in the future. Therefore, it is only natural that there are some natural dilapidations, and accidents and breakages throughout the course of a tenancy may occur.
    Regardless of whether it is accidental or not, repairs cost money. Therefore each property will be protected by buildings insurance which covers damage. We also ensure that every tenancy is protected by a tenancy deposit to the value of one month’s rent to cover any excessive wear and tear and minor damage/repairs required at the end of a tenancy.

  • What if there are any unforeseen costs, like a faulty boiler?

    Many people are put off buy to let properties by the thought that they may have to spend time and money sorting out problems such as broken boilers. Reap really is hassle-free and we will take care of everything from finding tenants and checking references to managing an inventory and dealing with unexpected problems. Since the property will have undergone a full refurbishment at the point of offer to Reap lenders, repairs will be minimal but will be attended to by our specialist contractors. This is at no cost to you.

  • There are increased regulations being introduced on landlords, will this affect Reap?

    Undoubtedly legal requirements to let property are on the increase. According to the Residential Landlords Association, there are currently in excess of 400 rules and regulations governing letting a property in the private rental sector. Some of the changes are good news while others will simply end up adding more regulation that good landlords will abide by and rogue landlords will ignore.
    Whilst we believe that some of these regulations are burdensome, we are committed to ensuring that we fulfil all of our responsibilities as a landlord. We are an Accredited Landlord and have elected to register with the Deposit Protection Service and recently became a member of the Property Redress Scheme.