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Rent Guarantee: a comprehensive guide to how they work and their benefits

Proptech
Rent guarantee
Rent Guarantee: a comprehensive guide to how they work and their benefits
Income guaranteed even before we find your tenant
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Renting out a property often presents a series of challenges for homeowners - dealing with potential vacancies, irregular rent payments, and the demanding property maintenance task.

An innovative new solution has emerged recently in property management to mitigate these issues and provide peace of mind to property owners: rent guarantees (also referred to as guaranteed rent.)

This comprehensive guide will delve into rent guarantees, focusing on how they work and their unique benefits.

Understanding rent guarantees

At its core, a rent guarantee is a commitment made by select property management companies to ensure the property owner receives a pre-determined amount of rent each month, regardless of whether the property is occupied or vacant.

This service, pioneered by companies like Doorstead, absorbs the inherent risks of renting out a property, such as vacancies and defaults on rent. Taking on full responsibility, including consistent rental payments to the homeowner, transfers risks from the owner to the management company to bring you more peace of mind.

Some key distinctions exist between landlord insurance, rental insurance, and a rent guarantee. Landlord insurance is typically a great complement to a rent guarantee for ultimate profit and protection. Learn more in this article, breaking down the differences between the three.

How rent guarantees work

A rent guarantee program is initiated with the management company setting a fixed monthly rental income for the homeowner, known as the guaranteed rent.

What is the rent guarantee offered by Doorstead?

Doorstead offers the Doorstead Rent Guarantee, which has helped hundreds of busy homeowners successfully transition into profitable landlords.

At Doorstead, a guarantee carries far more significance than a simple assurance. This is why we pledge upfront the monthly rent and start date for your property even before any operations commence. Moreover, by aligning our goals and incentives with yours, we ensure we expedite filling your property with only the most suitable tenants, optimizing the rental experience.

Doorstead maintains a fair and transparent pricing strategy, with an 8% monthly management fee for guaranteed properties and a one-time 50% fee for new tenant placements for the first month's rent.

Suppose Doorstead secures a rental price higher than the guaranteed amount. In that case, the homeowner receives the extra income. If the final rent falls short of the guaranteed price, Doorstead covers the difference, ensuring the homeowner's payment is never compromised.

The Doorstead Guarantee also includes up to $10,000 in eviction and damage protection, providing homeowners an additional security layer.


We believe in the power of a rent guarantee.

Traditional property management presents several challenges for homeowners. Unexpected vacancies can lead to significant income loss, and finding new tenants can be time-consuming and costly.

Collecting rent can also be problematic, with tenants sometimes defaulting or paying late, causing financial uncertainty. Property maintenance and repairs can be another major headache.

These tasks require time, effort, and expense, and when mismanaged, they can lead to dissatisfaction and headaches for tenants and homeowners and even reduced property value.

Complex problems can arise, from damage to the property to consistent late payments, to potential legal issues. All these challenges contribute to the stress of managing a rental property and can significantly affect the property's profitability and the owner's peace of mind.


Benefits of Rent Guarantees

Doorstead, a forerunner in offering rent guarantees, provides a comprehensive property management package that includes benefits beyond the standard offerings.

Learn more about how Doorstead’s full-service property management works.

Rent guarantees offer a host of compelling benefits to homeowners, some of which include the following:

1. Consistent Rental Income: One of the most significant advantages is the assurance of a steady monthly income. Knowing they'll receive a monthly amount, regardless of the property's occupancy status, helps homeowners manage their finances better.

You can calculate a guaranteed rent estimate by submitting your address to Doorstead below.

2. Minimized risk: Rent guarantees substantially reduce the inherent risks of renting out a property. The property management company now handles periods of vacancy defaults on rent payments or damage to the property.

3. Hassle-free property management: The guarantee includes full-service property management, such as tenant placement, rent collection, and maintenance coordination. This leaves the property owner free to enjoy the benefits of owning a rental property without dealing with the daily hassles of property management.

See how some recent customers have successfully collaborated with our Doorstead Guarantee rent.

4. Reliable tenant placement: The task of finding dependable tenants falls onto the management company, which employs advanced screening techniques and a wide-reaching marketing strategy to find the best potential occupants for the property.

5. Comprehensive maintenance and repairs: The property management company manages all maintenance requests and necessary repairs. This ensures the property stays in good condition and keeps the tenant satisfied.

6. Protection against evictions and damages: The management company takes responsibility when eviction becomes necessary. This often includes protection against damages, ensuring the homeowner's investment is safeguarded.

7. Automated remote property management: Rent guarantees ensure you get paid for your property every month while giving you the autonomy for more time and freedom. It’s a perfect solution if you’re moving and need to manage a rental property remotely easily.


Examining the financial implications of guaranteed rent

The financial impact of a rent guarantee program like Doorstead's can be significant for homeowners. Firstly, ensuring a fixed monthly income brings predictability to your finances, enabling better budgeting and financial planning.

Secondly, Doorstead's management approach can reduce maintenance and repair costs due to its proactive maintenance and high-quality tenant selection process.

Any surplus income is passed directly to the homeowner if the property is rented for more than the guaranteed price. This aligns Doorstead's interests with the homeowner, as they are incentivized to secure the highest possible rent.

Eliminating periods of vacancy ensures maximum annual revenue from your property.

Lastly, Doorstead helps free up time and energy for homeowners and renters to focus on the other areas of their life, bringing peace of mind and a higher quality of life.

Determining property eligibility for Doorstead’s Rent Guarantee

Given the risk associated with a rent guarantee, Doorstead maintains stringent criteria around the initial condition of the property, necessitating certain repairs to ensure it meets our Rent-Ready standards.

Additionally, in a Doorstead Guarantee contract, we hold sole discretion over tenant selection. To determine if your property qualifies for the Doorstead Guarantee, we encourage you to input your address and answer a few straightforward questions.


This figure is typically based on an analysis of the property and current market conditions.

The guaranteed rent and start date are presented upfront before any agreements are made. Once the homeowner agrees to the proposed terms, the property management company assumes responsibility for the property.

This includes marketing the property, screening and selecting tenants, handling lease agreements, dealing with maintenance, and ensuring the homeowner receives the monthly guaranteed rent. Learn more about what the duty encompasses in our comprehensive guide to property management.

Peace of mind with rent guarantees

Guaranteed rent represents a significant advancement in property management. It provides homeowners peace of mind from consistent income, minimized risk, and comprehensive property management, all bundled into one service.

If you're a homeowner considering a reliable, hassle-free way to manage your property, Doorstead’s rent guarantee could be the perfect solution. Enjoy the benefits of consistent, guaranteed income and full-service property management with Doorstead’s unique, full-service rent guarantee program.

To learn more about how Doorstead can transform your property management experience, enter your rental property address to begin learning more.

Ally Gong
Ally Gong
Content Specialist

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