Guaranteed rent is an arrangement where a company leases your property for a fixed term and pays you an agreed rent every month, whether the property is occupied or empty. The company finds and manages the occupiers, and you receive one predictable payment set out in a written lease.
How does a guaranteed rent lease work?
The provider inspects the property, works out what it would let for on the open market and makes you an offer: a fixed monthly rent, a lease length and a set of terms covering repairs, insurance and handback. If you accept, the provider signs a lease with you as a company tenant. It then places occupiers in the property and manages them day to day. Your rent is paid on the agreed date each month for the length of the lease.
Why is the rent lower than market rent?
The offer is normally below the full market rent because the provider carries the risks you would otherwise carry: empty periods between occupiers, late or missed payments, finding and vetting tenants and the cost of management. You are swapping a higher but uncertain income for a lower but fixed one. Whether that suits you depends on how much the voids, arrears and fees are costing you today.
Who pays for repairs?
This varies between providers and is one of the most important things to read in the lease. A common split is that the provider handles day-to-day upkeep and damage caused by occupiers, while the landlord stays responsible for structural items, the roof and major systems such as the boiler. Buildings insurance usually stays with the landlord. Make sure the split is written down before you sign.
What do I still need to do as the owner?
- Get consent from your mortgage lender if the mortgage requires it.
- Check a leasehold flat's lease allows the proposed use.
- Keep buildings insurance in place and tell the insurer about the arrangement.
- Carry out any repairs the lease leaves with you.
Is guaranteed rent the same as rent-to-rent?
The mechanics are similar: a company takes a lease and lets the property on. "Guaranteed rent" is the landlord-facing name for it. What matters is who the company is, how long it has traded and what the lease says. Our guide Is guaranteed rent safe? lists the questions to ask any provider.
How do I get an offer?
Use the guaranteed rent estimator for an indicative figure, then book a free valuation visit. After the visit we send a written offer. There is no obligation to accept it.