Many tenants plan to move into a new apartment. However, this often fails due to the high costs. The rent deposit guarantee is a relatively new concept that tenants can use to save on the cost of their rent deposit.
The costs of a move are indeed quite high: agency fees, removal transport, possibly a new kitchen, and last but not least the rental deposit swallows up several thousand euros in total. If you do not have high savings, you will quickly reach your limits financially. The rental deposit can be up to three net cold rents, and thus represents the largest share of the moving costs. However, clever tenants can save on the deposit. If you give the landlord a deposit guarantee instead of the usual cash deposit, you save money and maybe even your overdraft facility.
What are the advantages of the deposit guarantee?
The renter conserves their savings or even their line of credit by keeping the deposit amount for their own use. The guarantee can not only be taken out when moving, but also during an existing tenancy. Tenants can convert their cash deposit into a rental guarantee at any time and receive an additional cash injection through the repayment of the cash deposit. The deposit guarantee can be canceled at any time, so you are not tied to a specific term as with a loan. Another advantage of small loans are the significantly lower costs.
The landlord also benefits
While the landlord had to manage and settle all rental deposits for commercial properties accounts separately for the cash deposit, now only the certificate of the insurance company has to be filed in their own documents. Since the rent guarantee is only issued after a positive credit check, the landlord can assume that his new tenant has not accumulated any rent arrears from previous tenancies. At least at the time of moving in, this is considered solvent.
How do real estate agents benefit from the rental deposit guarantee?
As a broker, you are interested in finding apartments as quickly and easily as possible. However, a quick lease agreement may fail because the tenant does not have the deposit money available. The rent guarantee enables the cash deposit to be waived and provides the tenant with liquidity at the moment of the move. The guarantee solution is therefore a good sales argument to finally bring tenants and landlords together. The deposit guarantee brings another big plus for the real estate agent: since the tenant budget is now significantly larger due to the elimination of the one-time deposit, there is more financial leeway for the agent’s commission.
Where can I get a guarantee for my rent deposit and how much does it cost?
The rental deposit guarantee can be taken out with various providers. The conclusion takes place either over the house bank or directly over the Internet. The best way to find the cheapest provider is to do a price comparison, which you can easily do online. The exact costs depend on the amount of the deposit and the type of contract chosen. Depending on the provider, they amount to between 3.5% and 6% of the deposit amount per year. Bank guarantees are usually more attractive in price. However, they are only issued to tenants with an impeccable credit rating (no negative entry at the Schufa, fixed income). Insurance guarantees (rental deposit insurance) are usually slightly more expensive in terms of premium. Here, however, the tenant only has to prove that they have a flawless credit bureau, a fixed income is not a requirement.
Provider found, what’s next?
Anyone who has determined the cheapest provider can use the comparison table to switch directly to the provider’s portal. The application process is usually completely online. Only in the case of bank guarantees are additional proofs of income in paper form required. In the case of insurance guarantees, a flawless Schufa is sufficient as proof of creditworthiness. After a successful credit check, the application is usually processed within 48 hours. The guarantee document is then sent by post. In the last step, the certificate only has to be handed over to the landlord. The rental deposit is deemed to have been paid when the guarantee document is handed over to the landlord.