Rent Guarantee or Guaranteed Rent - what's the difference?

Regular rent payments matter to every landlord, but it’s especially important if you rely on them as your main source of income. Many landlords use rental payments to pay their own mortgages and late or missed payments can be seriously problematic.

So how can landlords protect themselves from tenants not paying up when they should? There are a couple of options on the market – Rent Guarantee and Guaranteed Rent – but what’s the difference? Read on for our quick and easy guide.

What is Rent Guarantee?

Rent Guarantee is a type of landlord insurance that will cover your monthly rental income in the event your tenants don’t pay up. It gives you the peace of mind you will still get the money you need even if your tenants are not paying, so your own financial position is protected.

How does it help?

Rent Guarantee insurance is designed to kick in if your tenants fail to pay rent and you start eviction proceedings against them. It can cover you for tenants who:
• Default on rent
• Cause deliberate damage to your let
• Refuse to leave following an eviction notice
• Are in dispute with you over renovations or repairs.

It’s different to Loss of Rent cover, which is there to cover you if you are unable to rent your property, for example due to fire or damage caused by an event covered in your landlord insurance.

With Rent Guarantee insurance, you can put in a claim usually when your tenants are one month behind on their payments. Your insurer will then pay your rent for a set amount of time, generally up to 11 months – helping you to remain financially secure while you look to evict non-paying tenants, which can be a lengthy and legally complex process. That’s why Rent Guarantee often includes a degree of legal expenses cover too.

Who is it for?

Rent Guarantee insurance is great protection for landlords who rely on rental income to pay their own mortgage or living costs, and also for landlords who are renting to new tenants and want peace of mind they’re covered if the new tenants prove tricky.

To make sure you can claim, you should have an Assured Shorthold Tenancy (AST) agreement in place with your new tenants, as well as a deposit taken before they move in and held in a deposit protection scheme.

You should also make sure you carry out independent tenant referencing and credit checks beforehand as this will help flag any potential problems. We are always happy to give you guidance on this, so get in touch if you need more info.

What is Guaranteed Rent?

Guaranteed Rent is a scheme that enables landlords to hand responsibility for their let over to a third party such as a company, council or individual, who then pays a fixed rent to the landlord for that period of time. Also known as Rent-to-Rent, it’s a type of property management scheme that means landlords can be sure of their rent, while somebody else manages their property.

How does it help?

Guaranteed Rent effectively enables the renter to sublet a property to tenants, while paying the original landlord fixed rent. For the landlord, this means they can be sure of their income throughout the scheme without the same pressures and responsibilities landlords often face.

For example, Guaranteed Rent means that somebody else will take on daily tasks such as property maintenance, rent collection, landlord insurance, inspections, finding new tenants and so on – all of which can be highly time-consuming. This gives landlords more free time and a guaranteed income all at the same time.

Who’s it for?

Guaranteed Rent schemes are great for landlords with big portfolios of properties, who may not have the time or capacity to look after them fully. It can also benefit landlords who own properties that aren’t local to them, making it harder for them to manage on a daily basis.

So how can Protect My Let help?

At Protect My Let, we offer Rent Guarantee insurance that you can purchase with the help of our experienced team. We’ll get to know your needs, whether you’re managing your own property or on behalf of a landlord, and find you the right cover so you’ve always got peace of mind your rent will be paid even if your tenants default.

Plus, as a broker, we’ve got all sorts of experience in the ins and outs of landlord insurance, so you can be sure we’ll find you the cover you actually need. We’ll go through the fine print for you, to make sure you’re fully in the know about how your situation is covered. And, as always, you’ll get the personal service offered by a team of real people, not robots.

Give us a call to find out more.