Guaranteed Rent for Landlords in Greater Manchester Explained

Could guaranteed rent for landlords offer peace of mind in the face of lost income?

As a landlord in North Manchester, Rochdale or Oldham, void periods can cause frustration as you must still keep up with mortgage payments, on top of which you have to cover the bills. Likewise, the risk of a tenant not paying may be at the back of your mind.

It’s not an unreasonable concern – after all, the National Residential Landlords Association (NRLA) has highlighted void periods as a potential challenge to watch out for in 2025.

If you place a high value on consistency, guaranteed rent may sound like an interesting option. Guaranteed rent services generally pay you a fixed monthly rent, whether the property is vacant or the tenant stops paying. However, you need to understand all the pros and cons before making any decisions.

Read on to find out how guaranteed rent could work for landlords in Newhey, Chadderton, Royton, Bury or Saddleworth.

What is guaranteed rent?

Guaranteed rent agreements usually run for between 1 and 5 years, and guarantee you a fixed rental income even if the tenant falls into rent arrears or the property is empty. Under the terms of a standard guaranteed rent agreement, the service pays the landlord a fixed monthly rent.

In return, the landlord gives the guaranteed rent service permission to rent the property to the tenant – in effect, sub-letting it.

What types of guaranteed rent services exist?

1.Rent Guarantee Insurance

If you take out an insurance policy for landlords to cover loss of income if the tenants fall into arrears, this is rent guarantee insurance. You would rent out the property directly to tenants, or with the help of a letting agent, with the insurance policy to cover lost rent if the event arises.

2.Rental Guarantee Through An Agent

Your letting agent may offer rental guarantee scheme which allows you to hand over a lot of the responsibility. Typically, the agent’s property management service will take care of maintenance, tenant finding and so on. As part of the service, the rent will usually be guaranteed for a set period of time, or up to a set amount – though the property is not leased to the letting agent.

Guaranteed Rent Schemes

Many local authorities, like Oldham Council, offer guaranteed rent schemes to increase their housing supply for council tenants. The council will sub-let your rental property in return for a monthly rental payment, either directly or through a property management company. They will handle the everyday running, tenant contact and repairs.

Similarly, estate agents can offer a parallel service to this, where you lease the property to them and they ‘sub-let’ to tenants on your behalf for a set period of years. Your rent will be fully guaranteed during this time. Obviously, it is important to check the letting agent’s credentials and experience in this area before opting for this service. Reason being that they need to be established and financially secure to make good on the guarantee.

What are the pros & cons of guaranteed rent?

The prospect of guaranteed monthly rent may be tempting, but it’s always a good idea to weigh up the positives and negatives before making a decision.

Pros Of Guaranteed Rent

Guaranteed rent offers potential advantages for many landlords:

• No late payments – you receive a regular income on time every month, whether the property is occupied or not
• Less responsibility – the letting agent takes on day-to-day property management and maintenance
• Avoid marketing – the guaranteed rent service sources tenants
• Fewer unexpected costs – cut out expenses such as utility bills and council tax payments during void periods, as well as repair costs
• No evictions – if a tenant has to be evicted, the service will handle this
• Incentives – some council-run guaranteed rent schemes offer incentives for landlords

Cons Of Guaranteed Rent

There are some negative points to consider, however:

• Initial paperwork – the set-up process can be more involved than renting directly
• Lower monthly earnings – you may not reach the highest possible monthly rent you could achieve by renting to individual tenants, and being locked in to a certain rental amount
• Tenant vetting – the guaranteed rent service may select the tenants, or provide you with a pre-selected list to choose from
• Long term contracts – Rent guarantee schemes lock you in to a long contract so it’s essential that you know the market and intend to stay in it for the long haul.

When should a landlord consider guaranteed rent?

Every landlord’s portfolio and objectives will differ, but you may be considering guaranteed rent if you want a relatively hassle-free way to generate a stable income – and have minimal personal involvement.

Nothing is completely risk-free, but in theory, a guaranteed rent scheme should reliably provide you with the month’s rent and remove much of the everyday stress of being a landlord.

How much does guaranteed rent cost?

The exact cost of guaranteed rent varies depending on the scheme, from a percentage of monthly rent, to zero. Note that guaranteed rent agreements typically offer a monthly rent that’s slightly under your rental property’s maximum potential. However, you’re removing the risk of unexpected costs or lost rental income for the duration of the agreement.

As with all financial decisions, you should always speak to an expert before you sign on the dotted line.

Feel confident about guaranteed rent schemes for landlords?

If you are considering guaranteed rent for landlords, we can answer your questions. Contact Cowell Norford today to discuss your rental property in North Manchester, Rochdale, Littleborough, Tameside or Oldham.

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