Guaranteed Rent vs Rent Insurance at a Glance
What Rent Insurance Gives You
Rent guarantee insurance, also called rent protection, is a policy you buy on top of a normal tenancy. You let the property yourself or through an agent at full market rent, and if the tenant stops paying, the policy covers the arrears to a limit, usually after an excess or waiting period and once a claim is approved.
The advantage is that you keep the full open-market rent and add protection against arrears for a modest premium. The trade-off is that it only covers one risk. Voids between tenants are still yours, management is still yours, and a payout depends on meeting the policy conditions, such as referencing the tenant properly and following the claims process.
What Guaranteed Rent Gives You
Guaranteed rent through a government lease, which is what RentPromise arranges, is not insurance at all. Your lease is with a local authority, housing association or the Home Office, which pays a fixed rent for one to five years whether or not it is occupied, and is responsible for the tenancy and the property’s condition for the term.
The advantage is that there is nothing to claim for, because the income never stops. No voids, no arrears risk, no management, and no policy conditions to satisfy. The trade-off is the headline figure: because the rent is funded within housing budgets, it is usually a little below the full market rent you could charge and then insure.
Common Questions
No. Guaranteed rent comes from a lease that pays you whether the property is occupied or not, so there is nothing to claim. Rent insurance is a policy on an ordinary tenancy that pays out only if a tenant defaults and you meet the conditions. One removes the risk of lost income; the other covers part of it.
Usually not. Rent protection policies typically cover arrears when a paying tenant stops paying, not empty periods between tenancies. Those voids remain your cost. A guaranteed lease is different: the rent is paid every month for the term whether or not the property is occupied, so voids never cost you anything.
On headline rent, often yes, because you keep the full market rent and only pay a premium. But that ignores voids, management and the conditions on a claim. A guaranteed lease pays a little less on paper but has no voids, no management and no claims, so the real gap depends on how your property actually performs.
Under rent insurance, you make a claim and, if the conditions are met, the policy covers the arrears after any excess or waiting period. Under a guaranteed lease, it is not your concern: your rent comes from the government body, not the occupant, so a resident’s circumstances do not affect the money you receive.
See what aguaranteed lease would pay you
Tell us the address and a few details, and we will come back with an offer setting out the fixed rent and the term, so you can weigh guaranteed income against keeping full rent with insurance on top. Free survey and valuation, no obligation.
Or call us on (612) 123 - 4456 78 to talk it through first.