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  • Writer's pictureElliot Leigh

How Does Guaranteed Rent Work?

Guaranteed rent, also known as rent to rent, is where an individual or company takes over a property, for a period of time, from a landlord and guarantees to pay a fixed rent to the landlord. The landlord gives consent to the third party, the renter, to then rent the property to other tenants. The renter then becomes liable for the rent, regardless of if the tenant pays or not.

Often, landlords choose guaranteed rent, rather than a traditional rental contract, because it means the rental income is guaranteed, regardless of whether the tenants who live there pay, or if the property becomes empty.

Usually, a guaranteed rent contract also means the renter, ie. the estate agent takes responsibility for any damage to the property, as they are contractually obligated to hand it back in the same condition it was received.

Most of the differences between guaranteed rent and standard rent are only noticeable from the perspective of the landlord or the letting agent. If you are a tenant the rental experience will not be too different from a standard, managed rental agreement.

Benefits of guaranteed rent:

Guaranteed monthly rent paid: The most important advantage of guaranteed rent in the UK is that the third party is responsible for paying the property owner with the timely rent. The owners don’t have to go chasing after the rent as a payment is guaranteed to be received.

Property owners do not have the responsibilities of managing and maintaining the properties.

Another advantage of a guaranteed rent is that the property owners don’t have to worry about spending a lot of their time managing and maintaining their property. All the inconveniences that might occur will be handled by the third party. The landlord doesn’t need to worry about interviews, references, arranging viewings and deposits, as all this is handled by the guaranteed rent provider.

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