A rental guarantee is a promise that you'll receive a set rent for a set time after a new home is finished, whether or not it's tenanted. It can make the first years of an investment more predictable. But a guarantee is only as good as the company giving it, and it eventually ends. So check what's behind it, and make sure the home makes sense without it.
A few of our listings come with a leaseback or rental guarantee. This guide is the checklist we'd want any buyer to work through.
How rental guarantees and leasebacks work
- Rental guarantee: the home is let to tenants in the usual way. If the rent received falls below the guaranteed amount, or the home is empty, the guarantor makes up the difference for the guarantee period.
- Leaseback: a company (often the builder or developer) leases the home from you for a fixed term and pays you rent directly. Display homes are often sold this way, with the builder leasing the home back while it's used for display.
Either way, the terms are set by a contract. Read that contract as carefully as the purchase contract.
Seven questions to ask
1. Who is giving the guarantee?
Get the full legal name of the company. Is it the builder, the developer, or a separate company with few assets of its own? Moneysmart, ASIC's consumer website, suggests checking ASIC's registers and lists before you deal with a company.
2. How long does it last?
Guarantees usually run for a fixed period. Ask exactly when it starts (at settlement or at completion) and when it ends.
3. How does the guaranteed rent compare with the market?
Ask a local property manager with no link to the sale for an independent rental appraisal. If the guaranteed rent is well above what the home would normally earn, ask what happens when the guarantee ends and the rent resets.
4. Is the cost built into the price?
Someone pays for a guarantee. Compare the price with similar new homes nearby that don't have one.
5. Who manages the property?
Some guarantees require you to use a particular property manager. Check their fees, what they cover, and whether you can change managers.
6. What does the contract exclude?
Look for conditions that can end or reduce payments: rent paid net of fees, caps on top-ups, or clauses that let the guarantor stop paying.
7. Does it stack up without the guarantee?
Run your numbers at market rent, with realistic vacancy and costs. If the investment only works with the guarantee, treat that as a warning.
Have your solicitor read the guarantee or lease agreement during the cooling-off period, and ask your lender whether they'll count the guaranteed rent or only market rent.
When a guarantee can help
From a strong guarantor, at a rent close to the market, a guarantee can take some of the uncertainty out of a new build's first years. It can also help with cash flow while you get used to owning an investment property.
It's one feature to weigh, alongside the location, the price, the build quality and the depreciation available on a new home.
Find homes with a guarantee
On our properties page you can filter for homes with a leaseback or rental guarantee. Ask us for the guarantee terms on any home you're interested in, and we'll send you the details to review with your advisers.
Common questions
What is a rental guarantee?
A promise, usually from the builder, developer or a related company, to pay you a set amount of rent for a set period after the home is finished, whether or not it's tenanted.
What's the difference between a rental guarantee and a leaseback?
With a leaseback, a company leases the home from you for a fixed term and pays you the rent, often using it as a display home or sub-letting it. A rental guarantee tops up or pays the rent for a period while the home is let to tenants.
Is a guaranteed rent a sign of a bad investment?
Not on its own. But the guarantee is only as strong as the company behind it and only lasts for its term, so judge the home on its own merits too.
This article is general information only, current at 30/10/2026. It isn't financial, tax or legal advice. Rules and amounts change, so check the official sources below and speak to a licensed professional about your situation.
