What types of bailouts do rent and how do they work?

For the rental of real estate, a requirement that you can not escape is the question of bail. It is a guarantee to the landlord that the rent will be paid in full and up-to-date. To this day, the most commonly used type of bail is the guarantor. However, real estate companies have offered tenants other options that facilitate the leasing process. Get to know today, what are the types of bail and how each one works.

GUARANTOR

GUARANTOR

Bail by means of a guarantor is still the most used at the time of renting a property. But how does it work?

Well, in this type of guarantee, you will need a second person who will serve as co-responsible for the payment of the rent. In this case, the guarantor must own a repossessed property and present the supporting documents during the lease process. Generally, it is required that the property of the guarantor is located in the same city in which the new property will be rented.

If at any time the lessee becomes defaulted on the rental payment, the guarantor is responsible for such debt, receiving a legal action if he fails to meet the expenses.

This is the type of bail most advantageous, financially, for the lessee, because it does not generate extra expenses (as we will see in the following topics). The hardest thing is to find a person who agrees to become a guarantor and who has the necessary requirements.

BANK INSURANCE

BANK INSURANCE

In this type of guarantee, the lessee hires the service with some insurer. The value of the insurance can reach up to 3% of the annual value of the rent and the contract needs to be renewed annually.

As there are several types of coverages, before you hire the insurance, talk to the real estate agent or landlord to see if the type of contract you want to close is accepted by them.

This is the second type of guarantee most wanted and one of the safest for the lessor since, in case of default, the payment of the rent is the responsibility of the insurer and is done quickly, not requiring legal proceedings.

CAUTION

CAUTION

In the security deposit, the lessee deposits the equivalent of three months’ rent to the lessor. If, at the end of the contract, there is no default on the part of the tenant, the amount is returned in full to the tenant.

The advantage of this type of bail is that there is no need to resort to a third party (insurer or guarantor). However, it will be necessary to disburse the amount of the bond at a single time.

CAPITALIZATION TITLE

CAPITALIZATION TITLE

In this case, the lessee buys a capitalization security as security for the rent. At the end of the contract, if there are no debts, the tenant can withdraw the amount with the monetary corrections. Otherwise, the value is taken out by the owner of the property.

SPECIAL FEE FOR UNIVERSITY MEMBERS, IN Corise family

SPECIAL FEE FOR UNIVERSITY MEMBERS, IN Elliot family

Considering the difficulty of the students finding a guarantor in Juan Carlos, since they came from other cities, the Elliot family offers a special kind of bail for university students.

In this case, if the parents are the guarantors, there is no need to present a property as collateral.

Corporate bond – debt security

Corporate bond, corporate bond (called. Corporate bond) – debt security, issued by the company pursuant to the provisions of the Act on Bonds 29.06.1995.

Corporate bonds may have a paper or intangible form (in the form of records kept by KDPW SA, a bank or a brokerage house).

Corporate bonds are associated with a higher degree of risk than other types of bonds.

The reasons for issuing bonds by enterprises:

The reasons for issuing bonds by enterprises:

  • resulting from the investment needs, the need for additional funds for a period of more than one year,
  • the possibility of obtaining a cheaper source of financing compared to the issue of shares.

Types of corporate bonds:

Types of corporate bonds:

Due to the method of collateral, corporate bonds are divided into:

  • secured – the issue of bonds is secured, eg by other bonds, mortgage collateral,
  • unsecured (corporate debenture bond) – bond issue is not secured. Unsecured bonds are issued primarily by large enterprises with stable financial standing and high ratings.
  • junk (corporate junk bond ) – corporate bonds issued in order to buy out failing companies. They are characterized by a lack of asset collateral and a higher interest rate. Most often, they can be exchanged for company shares.

Due to the method of interest, corporate bonds are divided into:

Due to the method of interest, corporate bonds are divided into:

  • fixed-rate bonds – a type of fixed-income securities, where the interest is determined from the beginning and the redemption value is equal to the nominal value of the bonds,
  • floating rate bonds (indexed bonds) – type of variable income securities, where the value of interest and buyback is increased by the inflation level of a given parameter (eg WIBOR),
  • zero-coupon bonds (discount bonds) – after the redemption period, the issuer pays the bond buyers the amount equal to the nominal value of the bonds. The sale price of zero-coupon bonds is lower than the nominal price.

Due to the privileges, corporate bonds are divided into:

Due to the privileges, corporate bonds are divided into:

  • usually,
  • variable – with the possibility of exchanging bonds for company shares,
  • with a warrant – the buyer has the right to purchase the shares of the company which is the issuer of the bonds at a predetermined rate.