UpperKey Blog

What are Guaranteed Property Rental Schemes?

There is nothing more frustrating for a landlord than not receiving your rent payment from a tenant. Tenants are culpable for the payment of rent as agreed in the tenancy contract, but it doesn’t always come through for varying reasons. This is where guaranteed property rental schemes can be a knight in shining armour. This post explores guaranteed property rental schemes and what exactly they can do for landlords in the lurch.

What is Guaranteed Rent?

This scheme focuses on when a tenant does not, for whatever reason, provide the agreed rental sum on time or at all. There is nothing more debilitating to a business than not receiving payments, and being a landlord is a business venture. Without this money, there is a risk that their own mortgage is affected, and their livelihood as well. The repercussions are multiple, but there is a way to avoid being caught out by tenants through this guaranteed rent approach.

When a landlord signs up for this scheme, they are legally signing over the rental responsibilities to an external company. By doing this, the company then becomes the legal tenant and assumes all responsibility for future rent payments. This agency then goes on and sub-lets the property further to suitable tenants who remain in occupancy under a fixed term as per their rental contract.

When this scheme is in place, a landlord is protected from vacant property issues that generate no payments and also from any arrears that may occur. This makes them a middle man for all intents and purposes and the tenants will only ever have contact regarding the property with the independent agent sitting between the landlord and them. Rent guarantee insurance sounds good so far, right?

Renters making a home inspection before renting.
UpperKey explains how guaranteed rent schemes work.

Why Might a Landlord Not Receive a Rental Payment?

As we have said, there are multiple scenarios in which a property rent may be missing or late. The most common reasons are as follows:

1. A tenant is late with their payment.

When a tenant fails to make their rent on time, the landlord is immediately affected. If there are no pre-existing lines of communication, it can be difficult to overcome this issue. There are legal protective procedures that a landlord can explore to recover lost rent, however, these can be costly in terms of time and in terms of actual money.

So, it is a much better prospect for this to never be an issue. Rent schemes such as the guaranteed rental income initiative can ensure that if this event were to occur, a landlord is fully protected. They still receive their money and they don’t have to waste valuable time or energy in chasing tenants for what is owed to them with regard to the property that they are letting out.

2. A property is left vacant.

Sometimes tenants move on to different pastures. This is an unavoidable annoyance in the world of a landlord renting and, when it does occur can be a worry for the person relying on that income. It may be the case that everything was left mutually agreeable and the tenants have just moved on naturally, or it could be that a landlord has been forced to evict tenants for more unfavourable reasons.

Whichever scenario has happened, it still leaves the main issue that a property is vacant and therefore nobody is paying for it. Rent schemes protect a landlord in this situation as money is still paid on time as agreed regardless of whether there is a tenant in situ or not.

How Can a Landlord Protect Themselves Against Tenant Arrears?

There are certain steps that a landlord can take to try and eliminate the stress of rent arrears from happening. Firstly, they can properly vet tenants before agreeing to a contract. This includes performing credit and employment checks before engagement. Credit checks can show a comprehensive history of how a tenant has handled their financials in the past and currently. It provides information such as debt owed, credit lines taken, and the current status of any and all bank accounts. It also shows address history, which may or may not be relevant on a case-by-case basis.

Employment checks are a way to verify that the prospective habitant has suitable and credible income regularly. Anyone can say where they work, but it is a landlord’s responsibility to verify it. These are simple and smart moves that every landlord can engage with to protect their assets. You can also interview potential tenants and sift through certain criteria if you want to take this one step further.

For example, lots of landlords lean towards younger, working couples as they are a good profile for a renting market and more likely to fulfil their rental responsibilities.

The only guaranteed way that you will never lose money is through engaging with an external rent guarantee scheme. As we have discussed at length, they are a provision for late payments and vacancy issues and a way to ensure that you never go without what is owed to you for letting out and managing a property. They also detract from the actual admin of it all and leave that to the professionals. This way you are less liable and have fewer culpabilities with regard to your property and the current residents. You can find more information about all things renting from UpperKey.

The Takeaway

Let’s take things down to simple terms.

1. Are Rent Guarantee Schemes a Viable Option for Landlords? Yes. They quite literally ‘guarantee’ that rent will be paid regardless of the circumstance.

2. Are Rent Guarantee Schemes recognized nationally? Rent Guarantee Schemes are a national policy that can be applied across the country in any property that is legally aside for renting purposes.


The bottom line is that in order to run a successful landlord venture, you need to have your rent paid to you on time and on a regular basis. Without this guarantee, you are opening yourself up to a world of failure and a crash and burn consequence trajectory. Rent is the most important outcome for any and all landlords, so taking steps to protect and ensure its arrival seems like the smartest move to take.