Rent Guarantee Insurance: What is it and how does it work?

Keep your cash – rent without a deposit


🔐  Rent guarantee insurance protects landslords against loss of income if a tenant falls behind or defaults on rent payments.
🤝  Rental insurance is a new alternative to classic rental deposits which help avoid a lock-up of a tenant’s working capital.
🙋‍♀️  Insurers will look to the financial stability and creditworthiness of the tenant(s) before underwriting the policy.

Enormous amounts are tied up to secure the rental income streams

Historically, deposit and bank guarantee have been the two dominant alternatives for landlords to ensure potential losses due to a tenant’s default or damages the rented premises. Here are a few startling data points:

  • In 2019, an insurance service provider stated that $45 billion was tied up in upfront security, solely in the residential segment in the US.
  • For the European residential segment, deposit volumes were estimated to reach +€70 billion in 2023.
  • Over €1 billion is estimated to be tied up in commercial real estate in the Nordics, according to market research conducted by Ebie.

Needless to say, these significant amounts of capital could be put to better use in today’s challenging times.

The deposit is a type of plegde paid when signing a rental contract and is usually required when renting a home and any type of commercial space. If a tenants breaches its obligations under the lease, the landlord can use all or part of the deposit to cover its costs. This protects the landlord in case a tenant becomes insolvent and cannot pay the rent. The size of the deposit can vary greatly from lease to lease and from landlord to landlord. Usually the deposit is equivalent to three to six months’ rent, but is it not uncommon (especially not in commercial real estate) for the amount to be as high as nine or twelve months.

A bank guarantee means that the tenants’ bank guarantees the rental commitment. The bank guarantee usually has a counter guarantee amount, i.e. the amount the tenant has to provide as security to the bank in order for them to issue the guarantee. The counterpart amount usually corresponds to the bank guarantee amount, meaning that the tenant is locking up the same amount of money as with a deposit, but also pays interest for the service. The 2017 Basel 3 framework increased capital requirements for bank guarantees, meaning that very few tenants can get a bank guarantee without depositing almost the entire amount with the bank in the form of escrow. Applying and receiving a bank guarantee is a demanding process and a processing time of 6-8 weeks is not uncommon.

While some landlords may rely solely on robust tenant screening processes, unforeseen circumstances can disrupt rental income streams. Deposit or bank guarantee as rental security provides great value for the landlord, but locking up working capital is not an ideal scenario neither for individuals or businesses. Enter, the rent guarantee insurance.

What is rent guarantee insurance?

🦺 Rent guarantee insurance serves as a safeguard for landlords against financial losses incurred due to tenants failing to meet their rental obligations. In such cases, the insurance covers the monthly rent for a predetermined period, compensating landlords for the lost income.

This type of risk management tool started off for residential lease agreements in the UK and is becoming more and more popular throughout the world, as it serves as a smarter substitute to the traditional alternatives deposits and bank guarantees.

How does it work?

  1. The rent guarantee insurance: A convenient way to guarantee the security of the landlord without having to lock up valuable capital in a deposit. The guarantee gives the landlord the same protection as a deposit or bank guarantee, but lets the tenant keep the money. Instead, tenants (or landlord) pay an insurance premium based on the tenant’s individual risk profile.
  2. Apply: Most providers of this service offer online application, where the the basic information about the rental relationship is required. An application can be made wherever the tenant is in the process; just thinking about moving or is already in the new space and wants to replace its deposit.
  3. Wait for processing: The provider calculates the risk profile, collects approval from the landlord and prepare the contract.
  4. Signing the insurance: If the risk profile is approved by the insurer and the landlord accepts, a quote will be sent for approval.
  5. All done: Now, the tenant can choose how to invest the capital otherwise locked in a deposit.

⏩ Depending on the service provider’s level of automation, this process usually takes 1-5 business days.

Rent Deposit Guarantee for your Accommodation in Germany | Fintiba

No wonder why this solution is gaining traction

  • The two traditional alternatives deposit and bank guarantee are win-loose alternatives: the landlord is protected, but to the cost of the tenant’s liquidity
  • Higher interest rates and inflation is making cash more valuable than ever
  • The Central Business Districts of many major property markets are faced with record high vacancy rates, making services like the rent insurance a selling point when commercial real estate owners negotiate to maintain or attract new tenants

Some of the rent insurance providers have invested a lot of money to create fully digital, seamless handling processes to help asset owners or operators get full control of its risk management – not only as a single-use solution but part of their overall asset management.

Limitations and considerations

Insurers conduct thorough evaluations before issuing the insurance and tenants with a history of payment defaults may face rejection. Additionally, residential tenants are ofter required to have a stable employment and sufficient income, as a commercial tenant need to have a stable financial track-record to meet rent obligations.

As part of our mission, we will always look to support solutions that radically improve the way we live, work and relax. That’s why we at AMAVI invested in the Swedish company Ebie: protecting commercial real estate companies through insurance, for a fraction of the cost for the tenants. Ebie’s vision is to remove deposits from the market through a digitalized handling process and with valuable features for landlords to manage risk portfolios.
Feel free to reach out to us if you want more information on the topic or discover more about AMAVI here.

Rent guarantee insurance in commercial real estate

Ebie launched its first solution in 2022 and has already freed +€10M from deposits in the Nordics.

The market tailwinds for commercial real estate is very similar to the private market: the interest hike creates a higher need for cash and as the real estate market is forced to become more modern, landlords need to adapt to tenant wishes. Also, banks and credit institutes values secured cash-flows, motivating asset owners to get in control of its risk management.

🧩 Two innovative rent guarantee solutions for CRE

One-off (direct-to-tenant) and Group insurance (direct-to-landlord)

🤝 The one-off insurance is an insurance between a tenant and a landlord and works precisely as described above:

1. A tenant is looking to lease an office, a warehouse or retail space and want to avoid locking up working capital
2. The landlord wants protection and are happy with the rent insurance policy
3. The tenant has a solid track record and the insurer sets the premium at 3%

Instead of locking up 9-12 months of rent in a deposit, the tenant will pay 3% of that amount as an annual insurance premium

🏢 The Group Insurance
For landlords seeing great potential to further develop its risk management and increase its NOI, Ebie has developed a Group Insurance solution:
1. By pooling a portfolio of different risks, landlord’s get a fixed premium in a framework and can add new leases whenever they occur or are up for renewal
2. With a fixed premium and a way for tenant’s to avoid paying a deposit, the landlord can charge a fee for the service – creating an arbitrage opportunity and extra revenue stream potential
3. All Group contracts are easily added and managed through Ebie’s used-friendly platform, where additional portfolio risk analysis can be conducted

✅ The landlords get full control of its risk management and enables additional revenues

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Unpacking the Self-Storage Surge

Declutter your home, make room for what matters


📦  The adoption of self-storage accelerated by the COVID-19 pandemic, increasing housing prices, decreasing living space and other trends in recent years
📦  The traditional self-storage model has shortcomings and is being challenged by a number of new business models
📦  To meet the high customer demands, self storage business models should be more focused on efficiency and customer centricity.

1. Self storage is booming due to pandemic boost and secular tailwinds

  • Mainly COVID-19 but also a combination of other factors have created an increasing need for storage space which has led to a higher demand for self-storage.
  • Self-storage is a service that lets people and businesses rent storage space for their things. It’s often provided in large facilities, subdivided into units that customers can rent and access anytime. Self storage facilities usually offer different unit sizes and are in the close vicinity of homes or businesses. The length of the rental agreement can vary depending on the customer’s needs. It’s a convenient and flexible, but rather expensive way to store belongings.
  • Several factors have supported demand for self storage from residential customers in recent years. These include demographic and macroeconomic trends, such as population growth, urbanisation, higher levels of mobility, micro-living, increasing personal wealth, increased number of divorces, as well as increased consumer awareness. These trends have been particularly strong in urban areas, where high density levels, elevated housing costs and the scarcity of housing and storage space are expected to support longer-term pricing rates and occupancy levels. Demand from business customers has generally been supported by the growth of new online retailers and small businesses, which require flexible and cost- effective storage options. We expect these trends to continue to support the demand for self storage in the coming years. Source

Let’s dive into the main drivers of the increased demand for self storage next.

1.1 COVID redefined spare rooms to work-from-home offices

The COVID-19 pandemic has forced many people to set up temporary home offices in previously unused spaces, such as spare rooms and basements. This has allowed them to continue working remotely during lockdowns and stay-at-home orders. The pandemic has highlighted the importance of having a dedicated workspace and the adaptability of the workforce.

Unemployment levels across the world have been rising during the COVID-19 crisis. As a result, residential landlords face impact from jobless tenants who are unable to pay rent. As these tenants move back home with their families or explore other house-sharing options, downsizing residential space creates opportunities for the self-storage sector to store items that will no longer fit into smaller homes. Source

A simple query in Google Trends confirms that the request for storage was at its peak during COVID.

Note that the demand for storage really took off as from 2016.

1.2 Increasing rate of urbanisation brings more people to the city

  • According to the UN, 68% of the world population projected to live in urban areas by 2050.
  • Moreover, Europe’s level of urbanisation is expected to increase to approximately 83.7% in 2050. → more key takeaways here.

1.3 A ‘renovation wave’ is coming up

  • The European Commission has published the Renovation Wave Strategy as part of its efforts to achieve the objectives of the EU Green Deal. This strategy aims to improve the energy performance of buildings in the EU, with the aim of at least doubling renovation rates over the next ten years.
  • About 50% of the residential housing market in Europe has an EPC D or worse, whereas within 10 years from now, every home will need to have at least an EPC C. This is the equivalent of about 100M homes that need to be renovated in the next decade.
  • Renovations leads to a need for storing stuff temporarily.

1.4 Garage boxes gone, fewer cellar space

It has become common for newly built apartments not to include a garage box or a cellar as part of the sale. This is because construction prices have risen, leading to higher costs for developers. Focusing on profitability, many developers have decided to exclude these features from their projects, especially in dense urban areas. Additionally, increasing interest rates have decreased the purchasing power for buying a house or apartment. As a result, many new apartment buildings – particularly in urban areas – don’t have dedicated parking or storage space. This lack of space means that many apartment dwellers will need to find self-storage solutions to keep and access their belongings.

1.5 Change in consumer behaviour, new hobbies and digital nomads

Finally, there are some additional reasons why people need more storage space

  • Increase in belongings: With the rise of consumer culture, people are constantly buying new items such as clothes, electronics, and home decor. These items can quickly add up, leaving people with cluttered homes and insufficient space to store everything.
  • Another reason is the rise of new hobbies: as people’s interests and passions evolve, they may take up activities that require specialised or seasonal equipment (skiing, (kite)surfing, biking, etc).
  • Increasing divorce rates and the number of newly-composed families, also clearly lead to a need to store more stuff.
  • Lastly, the growth of the digital nomad lifestyle is also contributing to the need for more storage space: digital nomads are people who work remotely and often travel frequently, which means they may not have a fixed home base. As a result, they may need to store their belongings in a self-storage facility or other type of storage space while they are on the road.

2. Rising interest rates pressure housing prices, new business models arise

  • Rising interest rates are putting pressure on the affordability of building or buying a house. This means that the floor space one can afford is decreasing significantly.
  • According to an article from the World Economic Forum, almost half of the EU population lives in apartments.
  • Average yearly rent per square meter in Europe is now €290, up 7.9% from last year. Source. This inherently leads to that the fact that, on average, living spaces decrease.
  • In some European countries, we observe that residential floor space decreases over time – an evolution that is only expected to accelerate with current economic environment. Next to the increasing interest rates that puts pressure on buying a house, a smaller home might be more desirable for some households given that it means a decrease in monthly costs. Below, some examples of countries where this trend is taking place:

According to FEDESSA and CBRE’s latest annual report on self-storage, there has been a 5.1% growth in the number of storage facilities in Europe and a 4.8% growth in storage space in last 12 months. All of the above explains why the self-storage sector has boomed.

3. Self storage models compared

3.1 Traditional self storage

The traditional self storage business model has its draw backs resulting in a poor customer journey:

  • Time consuming back-and-forth traveling to store or pick-up items
  • Storage space is not made to suit your stuff resulting in paying more than what is actually used
  • Expensive: you pay for m3, but can only store m2, as you cannot pile very high (so inefficient)
  • Often need to rent a truck or trailer to move heavy or larger belongings
  • Often not digital and general lack of customer experience
  • No overview about what is actually stored at which location

💡 What could be stored?
Basically anything can be stored that finds itself at home, but some things are more desirable to get out of your way soon. Here are some examples of things that you should consider to store in a digital cellar:
1. Bulky Objects
2. Seasonal Equipment
3. Automotive tires and equipment
4. Papers and archives
5. Professional goods and equipment (such as marketing materials, showroom/seasonal furniture,…)

3.2 New business models disrupting the sector

The most disruptive factor is the fact that technology is involved to a high degree. Technology enables this sector to ‘Uberize’ the related services, use platforms to create more efficiency and make it less expensive to store externally.

Below are several new technologies related to the self-storage ecosystem. Some of these are complimentary and can be integrated in one other:

  • Peer-to-peer (P2P) storage is a business model in which individuals rent out their unused storage space to others. This can include a spare room, garage, or storage unit, and is facilitated by online platforms or apps. An example to this type of storage is offered by BoxBox.
  • Storage-as-a-service companies make it possible to store belongings without moving back and forth to the storage facility. They usually pick-up the user’s items at their home and deliver the desired items on-demand. Storage capacity is optimized, so you only pay for the actual m3 used. Through a periodic subscription fee, consumers only pay for what they store. Like P2P storage models, these companies usually provide a digital customer journey and handle the logistics as well. Examples are YouStock, Stored and Vinden.
  • Franchised storage solutions make it possible for individuals or businesses to transform unused space into storage facilities. Several financing or leasing plans are provided for the customer in order for them to install fully equipped storage units. Example is Flexistore.
  • Inner-city storage units are storage spaces that are 24/7 available, surveilled and autonomously accessible. These micro-hubs are an ideal solution for last-mile storage solutions. Examples are Storebox and Cobalt.
  • Drive-up storage models are technology driven storage solutions where storage hubs (often containers) are placed locally. The user has temporary access to (a part of) that unit where items can be stored. Once the hub is filled, the belongings will be picked up and stored remotely. This addresses the challenge of door-to-door solutions, such as storage-as-a-service, which can involve a lot of travel for small loads. Example is Lovespace.

In order to scale new self-storage solutions, having the right technology is crucial. Building a warehouse with numerous storage units that require a lot of manual labor is no longer sufficient.

As part of our mission, we will always look to support solutions that radically improve the way we live, work and relax. That’s why we at AMAVI invested in the French company YouStock and the Swedish company Vinden: enabling users to free-up space in their homes and companies by using an easy application with a visual library of the items stored in your “digital cellar”. Feel free to reach out to us if you want more information on the topic or discover more about AMAVI here.

YouStock‘s “valet” storage platform, offers a full-service digital model starting from the inventory, packing, and collection to the storage facility and return of the items. They connect users, moving companies, and storage facilities. They are active in France and Belgium, and optimize inner-city logistics by partnering with a network of moving companies and warehousing facilities.

Vinden is a digital platform offering new way of storing objects. They provide on-demand storage, by picking up, storing and returning objects of all sizes. They are currently active in Sweden and Norway. Vinden combines professional warehouse keeping with last mile delivery. Everything is operated with an in-house developed, customer centric, and user-friendly platform and app.

Benelux Office (HQ) 🇧🇪
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B-9810 Eke (Belgium)

🇸🇪 Nordics office
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114 55 Stockholm (Sweden)

Are you building a PropTech scale-up in Europe with proven product-market fit?

Water, water, everywhere, nor any drop to drink

4 min read

  • The water crisis affects billions of people around the globe. It involves flooding, droughts, scarcity, pollution and turbid water.
  • Only 2.5% of the global water supply is useful. Only 1.2% of that is available. Households are responsible for 10% of the total water consumption in Europe.
  • The real estate and construction industry plays a big role in mitigating the crisis by reusing water locally, monitoring overconsumption and densifying cities.

Why floods and droughts are the next global crisis

Extreme weather conditions are leading to water excess in some parts of the world, and severe water shortages elsewhere. And it’s only going to get worse. We’ve written this article to highlight the importance of tackling water scarcity, what PropTech can do about it, and AMAVI’s role in targeting this crucial issue.

Are we sleepwalking into a water crisis?

Scientists, environmentalists, and public agencies have long been aware of the issues. But recent news stories have alerted the public to a 21st century water crisis involving flooding, scarcity, pollution, and turbid water from sedimentation and soil erosion:

  • The Colorado River and its tributaries have been shrinking, affecting around 40 million people who rely on its water for drinking, agriculture, and electricity.
  • 30 million people were affected by the deadly 2022 floods in Pakistan.
  • Last year’s floods in Germany, Belgium, France, the Netherlands, and Luxembourg cost 240 lives and €38bn in damage.
  • The ‘drying up’ of China’s Yangtze River has drastically reduced hydroelectric generation, leading to factory closures.

Walking on thin ice

Increasing population inevitably means growing demand for water. Yet here on the ‘blue planet’ fresh water is only 2.5% of the total, and most of that is locked up in glaciers and ice caps. A further 30% of that 2.5% is ground water, and only 1.2% is surface water – a tiny fraction of the H2O on the planet. We can all see rivers and reservoirs, but ground water is less visible and tends to get managed poorly.

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Water levels at Lake Mead have fallen dramatically amid a record drought | NASA Earth Observatory

And even where water is plentiful, not all fresh water makes it to household taps and pipes. The public water ‘supply chain’ in Europe loses from 5% to over 50% of water abstracted.

Who’s most at risk?

Nearly 25% of the global population could face severe water shortages in the near future. In hot regions where the water supply starts off low, rising demand can quickly cause severe shortages. Qatar is heavily dependent on seawater desalination for its drinking water. In Chennai (India), the drying up of lakes recently led to violent protests.

Who are the baddies here?

At first sight, construction and real estate aren’t the worst offenders when it comes to water use. The biggest commercial users in Europe are oil and gas, agriculture, and textiles, with households responsible for 10% of total consumption.

But the water used in the construction process alone is still 3.4% of total European water consumption, and the ‘embodied water’ used for materials is significant (see right).

Refurbishment of older buildings uses less water than new construction, which can also reduce the open space where water can naturally infiltrate the soil and replenish groundwater reserves.

What about households?

Households account for 10% of the total water consumption in Europe. Only about 5% of that is for drinking and cooking, with the rest used for personal hygiene (33%), washing clothes and dishes (33%), and flushing toilets (25-30%).

The way houses are built and fitted out has a cumulative effect on water use throughout the lifecycle of the building. Energy and water savings from more efficient showers and appliances add up over the years.

Water waste has had a low profile compared to reducing carbon emissions, but it is moving quickly up the political and environmental agenda, and the public is increasingly aware of the benefits of grey water recycling systems and rainwater collection.


Aluminium: 88,000 litres per ton

Cement: 3,500 to 5,000 litres per ton

Steel: 39,000 litres per ton

Copper: 590,000 litres per ton

Plastic: 187,000 litres per ton

Source: The Royal Australian Institute of Architects.

Teaming up with the best

AMAVI is already investing in best-in-class solutions to tackle the crisis.

Shayp is a tech-enabled SaaS company that’s transforming how the building sector addresses leakages and unnecessary water usage, with *real-time water flow analytics and non-invasive sensors.

Leakages can have a serious effect on an organisation’s water bill since the vast majority go unnoticed or unreported. Using machine learning techniques and unobtrusive sensors, it identifies leakages and system anomalies in real-time, and the webapp alerts staff and helps prioritise interventions, based on the gravity of the leak and the appliance causing the leak.

Shayp has helped public and private organisations save hundreds of thousands of euros, including municipalities, hospitals, offices, retailers, schools, and multi-residential real estate owners. Thanks to Shayp, the City of Brussels is now saving over 50 million litres of water per annum.

Shayp’s solution to detect water leakages

Hydraloop has designed and developed a decentralised ‘grey water’ recycling system for homes and commercial premises. These award- winning devices help save both water and energy and can be used in cities, rural areas, and off-grid, where water supply may be unreliable.

The easy-to-use appliance treats shower and bath water so it can be re-used in toilets, washing machines, and for garden irrigation. It can save up to 45% of scarce drinking water, without compromising on convenience or comfort.

Hydraloop’s patented technology won multiple accolades at the CES 2020 trade fair in Las Vegas and is sold globally through a network of 140 sales, distribution, and service partners.

What’s next?

AMAVI believes the construction and real estate sector can punch above its weight in mitigating the effects of the water crisis, with PropTech providing answers and benefits throughout the lifetime of built assets. We’ll continue to build our specialist expertise in water management, and to seek out the most promising scale-ups in this exciting field.

Hydraloop’s solution to reuse grey water