Guaranteed rent vs rent guarantee insurance: what's the difference?
Search for 'guaranteed rent' and you'll find two completely different products sharing the name. A guaranteed rent scheme is a company leasing your property from you and paying a fixed monthly figure whether or not it's occupied. Rent guarantee insurance is a policy you buy alongside a normal tenancy that pays out if a tenant stops paying.
They suit different landlords and different properties — and the wrong choice can cost thousands. Here's how they compare on the things that matter.
How a guaranteed rent scheme works
A company (like us) signs an agreement to rent your property for a fixed term — typically one to five years — at an agreed monthly figure. We then operate it as serviced accommodation or a short let, keeping the booking income. You get the same payment every month including voids, with no tenant arrears, no management tasks and no day-to-day involvement.
The trade-off is that the fixed figure sits below the property's best-case short-let income — you're selling some upside in exchange for certainty. Reputable schemes also require the property to meet fire, gas and electrical safety standards before the agreement starts.
How rent guarantee insurance works
Rent guarantee insurance sits alongside a standard assured shorthold tenancy. You still find and reference the tenant (or pay an agent to), still manage the property, and still carry the voids between tenancies. The policy pays out only when a specific insured event happens — usually a tenant falling into arrears — and typically after a claims process with an excess and a cap.
Premiums usually run to a few hundred pounds per year per property, and policies commonly exclude the first month of arrears, require approved referencing, and cap monthly payouts at or near the contractual rent.
The real differences that matter
Voids: a scheme pays you through empty months as standard; insurance pays nothing for voids because no tenancy exists.
Arrears: under a scheme you never see arrears — the company owes you the rent, not a tenant. Under insurance, arrears arrive via a claim, weeks or months later.
Effort: a scheme removes management entirely. Insurance changes nothing about who manages the property.
Upside: insurance keeps 100% of the rental upside with you. A scheme caps your income at the agreed figure while the operator keeps strong months.
Which one suits your property
If you want hands-off certainty — especially on a property suited to short lets or serviced accommodation — a guaranteed rent agreement with a reputable operator is usually the stronger fit. If you want to stay actively involved, keep the upside and just cap the arrears risk on a standard let, rent guarantee insurance is the cheaper, lighter option.
We offer guaranteed rent on suitable properties across London, the North West, the North East and Kent, with a rent offer back within 48 hours of a valuation.
Frequently asked
Is guaranteed rent the same as rent guarantee insurance?
No. Guaranteed rent is a lease-style agreement where a company pays you a fixed monthly rent regardless of occupancy. Rent guarantee insurance is a policy that pays out if a tenant on a normal tenancy falls into arrears.
Does rent guarantee insurance cover void periods?
No. Insurance only responds to insured events during a tenancy — almost always tenant arrears. Empty months between tenancies are not covered.
Do I still manage the property on a guaranteed rent scheme?
No. The operator takes over day-to-day management, guests or tenants, cleaning and maintenance for the term of the agreement.
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