“Guaranteed rent, no fees” is one of the most common pitches you’ll see from agents and property companies, and it sounds like exactly what a landlord wants: paid every month, whatever happens, no management percentage eating into it. The catch is real, and it’s worth understanding before you sign anything.
How guaranteed rent actually works
A company takes on your property, usually on a lease or management agreement lasting several years, and pays you a fixed monthly amount regardless of whether it’s occupied or the tenant pays on time. In exchange, the rent they offer is set below what you’d get on the open market, sometimes well below, because they’re pricing in their own risk and the periods it might sit empty. You give up flexibility for certainty.
The catch we’d point to first
The guarantee is usually only as good as the tenant referencing behind it. If a scheme places a tenant without proper referencing and that tenant stops paying, the guarantee can turn out to have exclusions, or the company can struggle to cover the shortfall if it’s happening across several of their properties at once. We’ve seen a case where a tenant wasn’t properly referenced in the first place, the tenant then didn’t pay, and by the time the landlord went to claim, the original failure in referencing meant the claim didn’t hold up. Seven months of rent lost. The lesson isn’t that guaranteed rent is always bad, it’s that the guarantee is only worth what the referencing behind it is worth, and that’s very hard to check from outside the company offering it.
What you’re actually trading
Below-market rent, a long lock-in period you often can’t easily exit, and less visibility into who’s actually living in your property and how it’s being looked after. In exchange you get one thing: not having to think about void periods. For some landlords, particularly those with several properties and no time to manage the risk themselves, that trade makes sense. For most, it’s an expensive way to buy peace of mind that a properly managed, properly referenced tenancy gives you anyway.
Our view
We don’t offer guaranteed rent, and we wouldn’t recommend it as a first option. A fully managed service at 12% of the actual rent, with referencing done properly on every tenant, costs you less over a normal year than the gap between a guaranteed-rent offer and market rent, and you keep the flexibility to sell, move in, or change agents when you want to. See what’s included on our fully managed page, or compare it against tenant find only on our fees page.
Owner of HTG Property Group and HTG Mortgages, based in Winchester.
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