Every landlord has heard the phrase "guaranteed rent", and most are quietly suspicious of it. Guaranteed by whom? Paid from where? And what's the catch? Those are exactly the right questions, because the phrase is used loosely across the industry to describe several very different arrangements — some excellent, some mediocre, and a few you should walk away from. This guide explains, in plain English, how a genuine guaranteed rent scheme works, how to compare an offer against your current arrangement honestly, and how to tell a solid agreement from a shaky one.
The basic idea: the agent becomes your tenant
Under a guaranteed rent agreement — sometimes called a company let, a corporate let, or a rent-to-rent agreement — you don't let your property to an individual tenant at all. You lease it to the agency itself, for a fixed term, most commonly between one and five years. The agency pays you an agreed rent every month for the whole of that term, and then lets the property to occupants in its own name, at its own risk.
That single change of structure is what makes the guarantee real. The rent isn't insured, underwritten or promised on someone else's behalf. It's simply the rent on a lease, owed to you by the company that signed it, whether the property is occupied or standing empty. If the occupants leave, stop paying, or the property sits vacant for a month between lets, none of that is your problem — the company's rent to you is due all the same.
It's worth being precise here, because "guaranteed rent" is also sometimes used to describe rent guarantee insurance — an insurance policy bolted onto a normal tenancy that pays out if your tenant defaults. That's a useful product, but it is not the same thing: with insurance you still have a tenant, still have voids between tenancies, and still make claims when things go wrong. Under a true guaranteed rent scheme there is nothing to claim, because the money was never contingent in the first place.
How the agreement is structured
A well-drafted guaranteed rent agreement will set out four things clearly, and you should be able to find each of them within a few minutes of picking up the document:
- The term. How long the company is leasing your property — one year, three years, five. Longer terms mean longer certainty, but check how rent reviews are handled part-way through.
- The rent. A fixed monthly figure, the date it's paid, and the method. There should be no deductions from it — no commission, no management fee, no renewals charge. The figure on the page is the figure that lands in your account.
- Break clauses. Whether either side can end the agreement early, on how much notice, and in what circumstances. Symmetry matters: be wary of agreements the company can exit easily but you cannot.
- Condition and hand-back. The property should be documented with a full inventory and schedule of condition at the start, and returned in that condition at the end, fair wear and tear excepted.
You remain the owner throughout, with an owner's responsibilities — buildings insurance, the structure, and anything your lease or mortgage requires. Day-to-day management of the occupants transfers to the company. If any of that split is vague in the document you're offered, ask for it in writing before you go any further.
What you give up — and what you get back
The trade-off is straightforward and you should expect any honest agent to state it plainly: the fixed rent you're offered will usually sit somewhat below the open-market figure, because the company is taking on the risks you'd otherwise carry. In exchange, you get:
- Certainty. The same amount, on the same day, every month, for years at a time — easy to plan a mortgage, a pension, or a portfolio around.
- No voids. An empty month is the company's problem, not yours. Across a typical letting cycle, voids quietly consume two to four weeks of rent a year.
- No arrears. If an occupant stops paying, your rent still arrives, and the recovery process — with all its stress and cost — belongs to someone else.
- No management fees. There's no percentage taken off the top and no invoices for renewals, inspections or check-outs.
- Hands-off management. Repairs coordination, occupant queries and routine inspections are handled for the whole term, with documented reports so you can see the condition of your asset without lifting a finger.
The honest arithmetic: comparing an offer properly
The single biggest mistake landlords make when weighing up a guaranteed rent offer is comparing it against the headline market rent. That's not the number you actually take home. To compare like with like, work through your current arrangement honestly:
- Start with your gross annual rent at the market rate.
- Subtract your management fee — on a typical fully managed service that's 10–15% of the rent (see our fee schedule for exact figures).
- Subtract an allowance for voids. Two weeks a year is optimistic; four is common. That's roughly 4–8% of gross rent.
- Subtract the incidentals: tenancy set-up and referencing, inventory costs, renewal fees, check-out fees.
- Subtract something for arrears risk. Most years it's zero; the year it isn't, it can swallow months of income.
Run those numbers on a real property and the "gap" between market rent and a guaranteed rent offer often shrinks to very little — sometimes to nothing at all in return for years of certainty. Sometimes the fully managed route still wins on pure pounds. The point isn't that one answer is always right; it's that the comparison is only meaningful after the deductions, not before.
Who's responsible for what during the term
Repairs and maintenance
Day-to-day repairs and their coordination sit with the company: the dripping tap, the broken appliance, the occupant locked out at midnight. Structural matters — the roof, subsidence, anything an owner would insure — normally remain with you, and a good agreement says so explicitly, along with how larger works are notified and agreed.
Compliance
Gas, electrical and energy performance certificates still need to exist, and the agreement should state who arranges and who pays for each. (If you're not sure what's involved, our guide to safety certificates walks through every document and its renewal cycle.) In our scheme, keeping compliance current is handled as part of the management of the term.
The occupants
Referencing, right-to-rent checks, deposits and the entire relationship with the people living in the property belong to the company — it is their tenant, not yours. You should still expect transparency about how occupants are selected and how the property will be used.
Questions to ask before you sign
- Who exactly is my tenant? Get the company's registered name and number, and look it up at Companies House. You're entering a multi-year financial relationship; two minutes of checking is not paranoia.
- How will the property be used? Single family let? Sharers? Ask, and make sure the answer is consistent with your mortgage conditions, your head lease if the property is leasehold, and your buildings insurance.
- How are inspections documented? You should see photographic reports at regular intervals, not just be told everything is fine.
- What happens at hand-back? Ask to see the inventory process and how the end-of-term condition is assessed against it.
- What happens if the company fails? Uncomfortable but necessary. Understand your route back to possession of your own property if the worst happens.
- Are there really no fees? Read for deductions dressed up in other language — "administration", "setup", "renewal". Under a genuine scheme, the rent offered is the rent received.
Red flags worth walking away from
- Pressure to sign quickly, or reluctance to let you take the agreement away and read it.
- A company with no traceable trading history, no registered details, or a name that changes between the brochure and the contract.
- Vague or missing condition documentation at the start of the term — that's the document that protects your property at the end of it.
- An offer dramatically above what the sums can support. Guaranteed rent works because the company earns a margin between your rent and the letting income; an offer that leaves no margin is an offer that eventually won't be paid.
Guaranteed rent, fully managed, or tenant find?
Think of the three main service levels as a dial that trades money for involvement. Tenant find is cheapest and most hands-on: the agent sources and references a tenant, then everything else — rent collection, repairs, renewals, arrears — is yours. Fully managed hands the day-to-day to the agent for a percentage, but voids and arrears remain your risk. Guaranteed rent moves the risk itself: lower headline income, total certainty, zero involvement.
There's no universally right setting. A landlord living ten minutes from a property they know inside out may be perfectly happy on tenant find. A portfolio landlord financing against rental income, or an owner two time zones away, tends to value the certainty end of the dial far more highly.
Who it suits — and who it doesn't
In our experience, guaranteed rent fits landlords who recognise themselves in one of these descriptions: owners living overseas who can't respond to anything quickly; accidental landlords with one property and no appetite for midnight phone calls; portfolio landlords who want clean, forecastable cash flow across many doors; and anyone who has been burned by a long void or a slow-motion arrears case and doesn't want to repeat the experience.
It suits less well if you actively enjoy managing your property, want to capture every pound of a rising market, or plan to sell or move back in on short notice — a multi-year term is a commitment on both sides.
Common questions, quickly answered
Is the rent still taxed as rental income?
Yes. The money you receive under a guaranteed rent agreement is rental income from your property, and the usual rules on allowable expenses and reporting apply. If your circumstances are unusual — you live abroad, or the property is held in a company — speak to your accountant before signing, exactly as you would for any other letting arrangement.
Do I need to tell my mortgage lender?
Check your mortgage conditions before you commit. Most buy-to-let products are comfortable with company lets, but some specify the tenancy types they permit, and consent-to-let arrangements on residential mortgages can be narrower still. A reputable agent will expect this question and wait while you get the answer in writing.
What about buildings insurance?
You'll keep insuring the building as owner, but tell your insurer about the arrangement — the occupancy basis of the policy needs to match reality. It's a five-minute call, and it's the difference between a valid policy and an argument at claim time.
Can I sell the property during the term?
Usually yes — you're selling the freehold or leasehold subject to the agreement, and some investors positively like buying with guaranteed income attached. But your buyer pool is different from a vacant-possession sale, so if selling within a year or two is realistic, say so before you agree a five-year term, and look carefully at the break clause.
Who deals with the council, utilities and bills?
During the term, council tax and utilities follow the occupants in the normal way, and the company manages that relationship. Your agreement should say explicitly who is responsible during any empty periods — under a genuine scheme, that's the company, not you.
Getting an offer
If you'd like a fixed monthly figure for your property, the process is short: tell us about the property, we'll assess it, and you'll receive a written offer with the term, the rent and the conditions — no obligation, and honest numbers even if the answer is that fully managed would serve you better. Read how our scheme works, check our fees for the comparison, or request your appraisal today. We reply to every enquiry by email, usually within one working day.