What Is Guaranteed Rent? A Plain-English Guide for London Landlords

Guaranteed rent is a simple idea: a company leases your property for a fixed term and pays you the same rent on the same date every month, whether the property is occupied or not. For many London landlords it replaces the stress of voids, tenant-finding and repairs with one predictable payment.

How guaranteed rent works

Instead of letting to an individual tenant, you let your property to a company on a company let. The agreement is usually for one to five years. The company pays you an agreed monthly rent and, in return, has the right to let the property itself, often as serviced accommodation for business travellers, contractors and families on longer stays.

Because the company carries the risk of empty weeks, your income doesn't change if bookings dip. Its margin comes from running the property well, not from paying you less.

What's usually included

• A fixed monthly rent for the full term, paid on an agreed date.
• No void periods. If the property is empty, that's the operator's cost.
• Routine maintenance and minor repairs handled by the operator.
• Cleaning and inspections between stays, so the property is kept to a high standard.
• No tenant-finding or letting fees.

Some operators, including us, also cover the cost of furnishing the property on a guaranteed rent agreement.

How the rent is set

The figure depends on the location, size, layout and condition of the property, and on the length of the agreement. Longer terms usually allow a stronger monthly figure, because the operator can invest more in furnishing and setting the property up. A good operator will give you a clear figure in writing before you commit.

Who guaranteed rent suits

It tends to suit landlords who:

• want a predictable income they can plan around;
• live abroad or outside London and can't manage the property day to day;
• have had problems with voids, arrears or difficult tenancies;
• own a property between long-term plans and want it earning without hassle.

What to check before you sign

Guaranteed rent works well with the right partner. Before signing, check:

1. Your mortgage and insurance. Make sure your lender and insurer allow a company let and the way the property will be used.
2. Your lease or freeholder. If you own a leasehold flat, check the lease for restrictions on short or serviced lets.
3. The agreement itself. It should set out the rent, payment date, term, who pays which bills, repair responsibilities and how the property is handed back.
4. The operator's track record. Ask to see properties they already run, and how long they've been paying other landlords.
5. Memberships. Look for membership of a redress scheme such as the Property Redress Scheme, and ICO registration.

Is guaranteed rent the same as rent-to-rent?

Guaranteed rent is a form of rent-to-rent: the operator rents from you and then lets the property to others. It's legal when it's set up properly, with your full knowledge and consent. We explain what to look for in our guide Is rent-to-rent legal in the UK?

The bottom line

If you value certainty over squeezing out every last pound, guaranteed rent can be a very good fit. You trade some upside for a fixed income, no voids and almost no involvement. If you'd rather keep the upside, hassle-free management is the alternative.