If your rental income covers regular expenses, you need to know how much you can count on. With guaranteed rent, you agree on the amount of the payments and the conditions for paying them out even when the flat is vacant or the subtenant doesn't pay. When deciding, assess both the contract and the company that has to honour it. We'll show how a guarantee works, what it costs and what to ask us or any other provider.
Quick answer: guaranteed rent
At FLAT SERVICE, guaranteed rent works like this: we rent the flat from you and sublet it. The owner receives the agreed rent even when the flat is vacant or the subtenant doesn't pay; a lower actual sublease rent does not reduce it. If we achieve a higher sublease rent, you receive half of the difference above the expected sublease rent on top. The price of predictable income is a lower amount than you would get from trouble-free letting on your own: at signing, the agreed rent equals 82% of the estimated market rent, and you receive the offer as a figure in korunas. Other companies may offer different contractual models under the same name.
A guarantee makes sense for owners who cover regular expenses from the rent, live far from the flat or don't want to deal with the financial impact of every change of tenant. Before signing, check who owes you the money, when payments start, what the conditions for payment are and who pays for repairs.
What “guaranteed rent” can mean
The same trade name covers different models on the market:
| Model | Who owes you | Who has a contract with the person in the flat | Where the obligation to pay comes from |
|---|---|---|---|
| Lease and sublease (FLAT SERVICE Garant) | The company as tenant | The company (sublease agreement) | Lease agreement between you and the company |
| Management with a limited guarantee (Partner+) | The tenant in the flat | You (lease agreement) | Management agreement, limited compensation |
| Rent insurance | The tenant; the insurer in the event of a claim | You | Insurance policy with exclusions and an excess |
These products differ in scope and terms. Before comparing figures, find out who owes you the rent, who has a contract with the person living in the flat and what the obligation to cover a shortfall is based on. If the offer doesn't make this clear, ask for an explanation and the relevant contract clauses.
How Garant works legally
Under the Garant option, you sign a lease directly with FLAT SERVICE. We are your tenant and, with your contractually agreed consent, we sublet the flat. We pay you the agreed rent under the contract even when the flat is vacant or the subtenant isn't paying. Because the tenant is a company rather than a person living in the flat, the special protection for residential tenants under § 2235 et seq. of the Civil Code does not apply; the relationship is governed by the contract and the general rules on leases. That is exactly why its precise wording matters.
In practice, this means three things:
- You have a single contractual partner. You claim payment from us, not from whoever happens to be living in the flat. We handle choosing the subtenant and any changeovers. We have been looking after Prague flats since 2010.
- We are responsible for the subtenant. Selection, screening, the contract, debt collection and, if necessary, eviction. Our obligation to pay you the agreed amount remains.
- The flat remains yours. The lease changes neither ownership nor your obligations to the owners’ association, the tax office and your insurer.
The subtenant has a contractual relationship with us. Leases and subleases follow different rules, but a sublease doesn't justify pressure or arbitrary eviction either. Any problems are dealt with under the contract and the legal procedure.
What you pay for: not just work, but predictability
With standard management, the manager can organise the entire letting, but the risk of lost rent stays with the owner. With a guarantee, the contractual partner takes on an agreed share of that risk. That's why it makes no sense to compare offers solely on the highest number.
In a trouble-free year, letting the flat yourself or standard management may bring in more. With a guarantee, on the other hand, you pay for greater predictability: your budget depends less on whether the flat is currently occupied and the subtenant has paid. So judge its value partly by how big a shortfall you could cover from your own reserves.
Example: three years, three scenarios
Let's assume a flat with a market rent of 25,000 Kč a month and an illustrative guaranteed payout of 20,500 Kč a month. This is an illustration, not a FLAT SERVICE offer or an estimate for any specific flat. Here we treat the 20,500 Kč as the payout already agreed with the owner and deduct nothing further from it. We set the actual offer individually, listing all relevant costs and the tax treatment.
| Three years of letting | Letting yourself | Partner management (12%) 21% VAT is added to the fee. | Guaranteed rent (model) |
|---|---|---|---|
| Scenario A: no gaps, one tenant for all three years | 900,000 Kč | 769,320 Kč | 738,000 Kč |
| Scenario B: two changes of tenant, 2 empty months in total | 850,000 Kč | 726,580 Kč | 738,000 Kč |
| Scenario C: non-paying tenant, 4 months without payment, then 2 months empty, 20,000 Kč in legal costs | 730,000 Kč | 621,100 Kč | 738,000 Kč |
All amounts are before tax, repair costs and financing. For Partner, we calculate the fee only from rent actually paid. In scenario C, we deduct 20,000 Kč in legal costs from both letting yourself and Partner; for the model guarantee, we assume the company bears these costs. If a specific contract provided otherwise, the result would need to be recalculated. In the trouble-free scenario, managing the flat yourself leaves you with the most money. When income is lost, the value of the agreed guarantee becomes apparent, but the table says nothing about how likely each scenario is.
Alongside the outcome of each scenario, consider how a shortfall would hit your budget. If the rent pays a mortgage of 18,000 Kč a month, you need to cover the instalments even in scenario C. With a flat that has no loan and a sufficient reserve, absorbing fluctuations in income yourself may be more acceptable.
Seven things to check before you sign
This applies to an offer from us or from anyone else.
1. How much you actually receive, and from when
The contract needs a specific amount, due date and start of payments. Find out whether there is a period for preparing the flat before the first payment, how a partial month is handled and which amounts have already been deducted in the offer.
2. What the conditions for payment are
Check how the contract handles situations where the flat can't be used (a burst pipe, renovation of the building), major repairs and cases where the owner doesn't cooperate. “We pay when the flat is vacant” doesn't automatically mean payment under all circumstances.
3. How long the commitment lasts
A guarantee for a few months and a long-term lease are not the same thing. What matters are the grounds for termination, the length of the notice period, whether the rent can be changed and the procedure for handing the flat back. Also ask what happens if you want to sell the flat.
4. Who pays for maintenance and major repairs
Separate arranging a repair from paying for it. Clarify in the contract minor maintenance, appliances failing with age, damage caused by the occupant and investments that add value to the flat. Ask, for example, who would pay for a new boiler costing 40,000 Kč. A general promise to look after the flat doesn't answer this.
5. What counts as the flat's condition on return
You need an initial handover protocol, photos and a clear distinction between wear and tear, defects and damage (§ 2293 of the Civil Code). With a condition guarantee, also ask how fixtures and appliances are valued and how disputed items are handled.
6. How your income increases
If the offer includes an inflation clause or a share of higher sublet rent, ask to see it in a worked example. Without that, different offers can't be compared fairly. With Garant, the agreed rent is fixed in advance and your payout stays stable; a lower actual sublease rent does not reduce it. If we achieve a higher sublease rent, you receive half of the difference above the expected sublease rent on top; the conditions for raising it are set out in the contract.
7. Who stands behind the commitment
With a guarantee, you rely on a specific company's ability to honour the contract; it isn't an insured bank deposit. Find out how long the company has been operating, how many flats it has in this model, what verifiable references it has and whether it publishes its financial statements in the Commercial Register. Weigh these facts together. A first year in business with five flats and a track record of more than fifteen years are very different starting points, but a company's age alone doesn't guarantee it will meet its obligations.
Garant or Partner+? It comes down to the scope of cover
Partner+ keeps the management model: you have the lease with the tenant, and we add a Manager’s guarantee on top of market rent. Under the terms of the service, it covers both vacancy and unpaid rent up to a combined limit of one month's rent for every 24-month period of the contract. The fee is two percentage points higher than for Partner. This is contractual cover, not automatically an insurance product.
Garant is a different contractual model, with agreed rent paid by FLAT SERVICE. You receive the agreed amount for the entire term of the contract regardless of occupancy; the terms, exceptions and start of payments are set by the contract.
| Partner+ | Garant | |
|---|---|---|
| Your income | Rent actually received, excluding service charge advances, minus a 14% fee 21% VAT is added to the Partner+ fee; the payout takes this amount into account. | A fixed agreed amount |
| Covers vacancy | Up to the limit of the Manager’s guarantee | Agreed payments for the duration of the commitment |
| Covers non-paying tenants | Up to the same combined limit | Agreed payments don't depend on the subtenant paying |
| You share in market growth | Yes, higher rent minus the fee | According to the contract terms |
| Contract with the person in the flat | You | FLAT SERVICE |
| What to compare | Market rent with contractually limited cover | The agreed payment and the terms of the lease with the company |
When choosing, don't just ask about price. Ask yourself how much income volatility you're willing to carry on your own. Compare Partner, Partner+ and Garant
Who a guarantee suits and who it doesn't
Guaranteed rent makes sense if the rent covers your mortgage or other regular expenses, you live outside Prague or abroad, you've inherited or been given the flat and don't want to become a full-time landlord, or you simply want to separate owning the property from running it.
Another option may suit you better if you want to sell the flat within a year, will soon need it for your family, or enjoy managing it yourself and have a sufficient reserve. A flat with a lease can be sold, but the lease continues after a change of owner under § 2221 of the Civil Code. So think about the termination options before you sign.
With a single flat, the risk is concentrated: one shortfall hits your entire rental income. That's why it's worth comparing the cost of a guarantee with your own reserves and the amount you regularly need. We explain how to handle a specific problem in our article When a tenant doesn't pay rent.
Tax on guaranteed rent
For an individual who doesn't let the flat as part of business assets, income from FLAT SERVICE is generally taxed under § 9 of the Income Tax Act. You can claim either flat-rate expenses of 30% or actual expenses. Regular payments from a single contractual partner simplify record-keeping: twelve identical payments a year from one payer. Residential leases are exempt from VAT (§ 56a of the VAT Act), so there is no VAT on our payouts. You'll find more details in our guide to tax on rental income.
FAQ
Is guaranteed rent the same as rent insurance?
No. With our Garant option, FLAT SERVICE is your tenant and the agreed payments arise from the lease. With other offers, you need to check the specific model. Insurance, by contrast, is paid by the insurer in the event of a claim under the policy terms, usually with exclusions, an excess and a waiting period. Always check who is supposed to pay, under which contract and on what terms.
Is the guaranteed amount the same for every flat?
No. The offer depends on the specific flat, its condition, location and the terms of cooperation. A published percentage alone doesn't tell you how much you will actually receive. That's why we view the flat before making an offer.
What if I want to sell the flat or live in it?
The termination terms are part of the contract and we go through them before you sign. The lease has a notice period you need to allow for. Selling the flat doesn't end the lease; the buyer takes over the landlord's rights (§ 2221 of the Civil Code).
Do I get rid of all the risks of ownership?
No. Even with an agreed income, you remain the owner. Owners’ association contributions, major investments in the flat, property tax and building insurance are still yours. We take on income and operating risks to the extent agreed in the contract; your obligations as owner don't disappear.
Can I switch from Garant to Partner or vice versa?
Yes, by mutual agreement. Switching from Garant to Partner requires resolving the relationship with the subtenant in the flat; switching from Partner to Garant requires building on the existing lease. We handle both routinely.
The description of the options is based on FLAT SERVICE's public offer as verified on 12 September 2026; the binding scope is set by the contract. The model calculations are illustrative.
Sources and terms: Garant option, Partner+, Civil Code and Financial Administration: rental income. A company guarantee is a contractual obligation, not an insured bank deposit.