# Rental guarantee

Source: https://www.thailandpropertyinvestor.com/glossary/rental-guarantee

**Definition:** A rental guarantee is a developer's contractual offer to pay a buyer a fixed rental return, usually a set percentage of the purchase price each year for a stated number of years, whatever the unit actually earns.

A rental guarantee is a promise by a company, and it is worth exactly as much as that company's ability to pay. It is not backed by the state, and Thai law gives it no special protection. If the developer or operator fails, the buyer is an unsecured creditor.

Questions to settle before giving the offer any weight:

- Who signs it: the developer, a subsidiary or a separate management company, and what assets does that entity have?
- Is it supported by a bank guarantee or money held in a separate account?
- Is the percentage paid before or after common-area fees, management charges and withholding tax?
- How long does it last, and what are the terms once it ends?
- How many nights can you use the property?

Compare the price per square metre with similar property sold without the offer. Where a unit sold with the offer costs noticeably more, the buyer is in effect funding the payments from their own purchase price.

Treat the fixed period as temporary and assess the property on the rent it can earn afterwards. See [hotel-managed and rental pool schemes](https://www.thailandpropertyinvestor.com/guides/hotel-managed-and-rental-pool-schemes) and [rental yields in Thailand](https://www.thailandpropertyinvestor.com/guides/rental-yields-in-thailand).