Guaranteed rent guide

Guaranteed Rent for Landlords Scheme Explained

Over recent years there has been a huge increase in popularity for guaranteed rent. However at the same time there has been rise in scepticism with some people going by Rob Weber’s quote:

“If it’s to good to be true…it’s probably a fraud”

Well in this guide we are going to provide a comprehensive  explanation of guarantee schemes from what it is, ithe pros and cons, what to look out for and much more so that you can make a comprehensive decision on whether its right for you as a landlord.

Guaranteed rent for your property explained: How does it work

Simply, guaranteed rent is where a third party agreed to pay you the landlord a fixed rent each month over an agreed period. The third party in effect becomes the Renter / Tenant and in exchange takes control and management over the property and seeks to rent property out for a margin that is higher than the fixed rent paid to you the landlord. 

The Renter assumes the  risk of a guaranteed rent in exchange for the potential reward of making a higher income.

Now we have to clarify that a massive misconception that a guaranteed rent scheme is subletting. Subletting occurs when a tenant rents from the landlord on a standard Assured Shorthold Tenant (AST) agreement and then rents the property to one or more other tenants on an AST.

With guaranteed rent the landlord and the third party are entering a commercial agreement and so appropriate paperwork such as a guaranteed rent management agreement or contact will be used.

Guaranteed Rent Schemes

Guaranteed rent can come in different forms, products and polocies but generally will fall into one of the below three groups:

Guaranteed rent insurance

Guaranteed rent insurance serves as a solution for preventing against the loss of rental income once a landlord signs up a tenant. As a preventative measure these insurance policies are reactive as they only be used once a tenant goes into arrears and can typically take 8 to 41 weeks to pay out.

Whilst it can provide peace of mind knowing that you have some cover in case of rent arrears this may not be a suitable solution if you do not have the safety funds to cover your mortgage, bills, repairs and other costs until the insurance company pays out.

 Guaranteed rent council schemes

 Council back guaranted rent is a solution that many counils such as Milton Keynes have enacted to build a relationship between the council and the private sector to provide social housing.

The social housing can be for tenants experiencing personal challenges such as homelessness, unemployment, health and mental issues and the alike to civil servant professionals such as nurses and police staff.

If you you own property in less desirable areas or have had challenges with tenants on benefits such as DSS or universal credit, then council guaranteed rent would be worth looking into.

Guaranteed rent letting agents and companies

Forward Thinking Lettings offer a guaranteed rent scheme and established since 2005, we were the first guaranteed rent service provider in Coventry.

We realise the guaranteed rent solution may not be for everyone so have detailed the general pros and cons working with a provider


  • Consistent monthly income
  • No having to deal with problem tenants
  • No more late night or weekend viewings. Claim your time back
  • Hassle free. All maintenance and repairs handled
  • Property upgraded adding value and equity.
  • Zero voids


  • Limited control over the type of tenants
  • No control over the design and decoration
  • Guaranteed rent letting agent may go out of business
  • Potential risks of being liable if the property breaches local or national regulations.

Guaranteed rent fees

When renting your property yourself or using a letting agent there are fees involved.

If you rent it yourself there is the cost of advertisement, fuel and time away from work and family as you do viewings, credit and reference checks and deposit registration costs.

If you choose a letting agent there are fees associated if you choose either a Tenant Find or  Management service. If a Tenant Find you can pay typically a one month rent fee upfront whilst opting for a management service you will pay typically 10-12% plus VAT.

In both cases you still run the risk of no guarantee o the property being rented. You will have Voids!

With a guaranteed rent company there are typically no fees.

Depending on the condition of the property you may be asked to provide a rent free period to allow the guaranteed rent provider to complete design and decoration works on the home. We believe this is a small consideration in exchange for an increase in the property value.

guaranteed rent customer care

As a guaranteed rent company you will be managing landlord and tenant customers there is a duty of care to both. There is a duty to the landlord to ensure the property is well managed and to the tenant that the property meets all regulations. It’s for these reasons that we support the guidance provided by the Property Redress Scheme (PRS) that all providers are registered with a redress scheme such as the PRS or the Ombudsman.

guaranteed rent companies: what to look for

In the last 12-18 months there has been a significant rise in guaranteed rent companies being started by property newbies with limited experience. Like choosing a reliable builder it can be equally difficult cutting through the hype and marketing to find a reliable provider that you can trust and holds you and your property in high regard.

So here’s our recommendation on what to look for when choosing a guaranteed rent company:

  • Complete due diligence, undertaking financial and credit checks using Companies House
  • Ensure they are registered with a Redress Scheme such as the PRS
  • Ask for Testimonials or References from other landlords
  • Check they have Indemnity insurance
  • Ensure they are HMO specialists with a proven track record of managing HMO compliant properties.
  • Experience – check they have a long established record of delivering this service.

At Forward Thinking Lettings we pride ourselves on being the longest running guaranteed rent service provider in Coventry and surrounding areas and meeting all of the above checkpoints.

Hopefully after reading this guide you have had all your questions answered. If you have any further questions or would be interested in our services then please get in touch by completing the simple form below or call us.