- Rent guarantee insurance can protect landlords if a tenant stops paying rent, but policies can be difficult to claim on.
- Many landlords prefer guaranteed rent services because they know exactly how much they will be paid each month without needing to make an insurance claim.
- J Property Management’s Guaranteed Rent service helps landlords secure reliable monthly income alongside full property management, meaning they have all the benefits without the headaches that rent guarantee insurance can bring.
Rent guarantee insurance can be worth it in some cases, but it’s also worth exploring working with property managers that offer rent guarantee services as part of their offering, in order to receive the same benefit.
If you’re a landlord, few things are more stressful than a tenant falling behind on their rent. Your mortgage lender still needs to be paid, service charges don’t stop, maintenance issues still need dealing with. But suddenly, the rental income you’ve been relying on isn’t arriving in your bank account.
This is why so many landlords start looking into rent guarantee insurance. On paper, it sounds like a sensible safety net. But is rent guarantee insurance worth it? or are there better ways to protect your rental income?
The answer depends on what you’re really looking for. If you just want insurance against a worst-case scenario, it can be useful. But if what you actually want is complete confidence that rent will keep arriving every month, there may be an easier option around.
At J Property Management, we offer a Guaranteed Rent service which gives landlords the peace of mind they are after, without them needing to take out a separate insurance policy.
To find out more, contact the team today!
What Is Rent Guarantee Insurance?
Rent guarantee insurance is a policy that allows landlords to reclaim lost rental income if their tenant stops paying rent.
Most policies will pay out a monthly amount for a fixed period of time whilst the landlord goes through the eviction process. Many rent guarantee insurance policies also cover legal expenses, helping landlords recover their property if the situation becomes harder to handle.
For landlords who manage properties themselves, this can provide a level of reassurance that a difficult tenant won’t immediately leave them out of pocket.
However, it’s important to understand that rent guarantee insurance is exactly that: insurance. Like any insurance policy, it comes with a lot of rules and reclaiming isn’t always easy.
What Does Rent Guarantee Insurance Actually Cover?
In most cases, rent guarantee insurance covers any unpaid rent and the legal costs associated with recovering possession of the property.
Policies vary, but normally, most cover includes:
Missed Rent Payments
Many policies cover lost rental income up to a set amount every month, usually up to £2,500 per month.
Legal Expenses
If you need to go to court to regain possession of the property, legal fees and solicitor costs are also often included.
Tenant Eviction Support
The Renters Rights Act makes it harder for landlords to evict tenants based on things like missed rent. Some insurers provide access to legal specialists who help with the eviction process.
Mediation Services
Certain companies offer mediation services that aim to resolve any issues and prevent legal action being needed.
While all of that protection sounds attractive, landlords should always read the small print carefully and know that not all policies are created equal!
What Are The Downsides Of Rent Guarantee Insurance?
The biggest downside is that not every missed rent payment will automatically mean a successful claim.
Like with all insurance, most companies have very strict rules in place in order for the policy to be valid. If the process hasn’t been followed in the right way, your ability to reclaim could be affected.
Many policies will ask for some form of:
- In-depth tenant referencing
- Credit checks on all adult tenants
- Proof of tenants being able to afford the rent
Some policies also include an excess period, meaning landlords essentially absorb the first month’s missed rent themselves.
There can also be waiting periods before payments start, leaving landlords covering costs while the claim is being dealt with.
None of these issues make rent guarantee insurance bad, it just isn’t always as simple as it’s made out to be.
Is Rent Guarantee Insurance Worth It For Landlords?
Yes, rent guarantee insurance can absolutely be worth it if you’re managing your own property and want protection against missed rent. For many landlords, the relatively low annual cost of the insurance is worth it to give them a little peace of mind.
However, there is another question worth asking: Rather than protecting yourself if something goes wrong, would you prefer an arrangement where your rental income is guaranteed from the start?
That’s where guaranteed rent services like those offered by J Property Management become particularly attractive. At J Property Management, we offer a guarantee that rent will be paid on time every month, even if the tenant is delayed. That way, you have the same peace of mind, without needing to deal with an insurance company!
Is Guaranteed Rent Better Than Rent Guarantee Insurance?
For many landlords, guaranteed rent is an easier option than rent guarantee insurance.
The main difference is that insurance only comes into play after a problem has happened, whereas guaranteed rent is designed to provide certainty from day one.
Instead of worrying about claims, waiting periods or policies, you know exactly what income you’ll get each month.
That’s why many South London landlords choose J Property Management’s Guaranteed Rent service. We don’t just help landlords manage problems when they crop up, we help remove the uncertainty altogether.
To find out more, contact the team today!
How Does J Property Management’s Guaranteed Rent Service Work?
Our Guaranteed Rent service works by giving landlords the assurance that even if tenants pay late, we will pay the monthly rental to them.
For a management fee of 12%, landlords receive a full professional property management service alongside the reassurance that their rental income is protected.
That means we handle:
- Tenant communication
- Rent collection
- Maintenance issues
- Property inspections
- Compliance
- Ongoing tenancy management
Most importantly, our landlords know exactly where they stand financially.
Whether you own a single buy-to-let property or a growing property portfolio, our team can help you with the peace of mind you’re after.
Get in touch with J Property Management today to find out how our Guaranteed Rent service could work for you.
