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  • Rent-to-Rent

    R2R on mortgaged property

    Hi All,

    I am currently doing some extensive research into R2R to see if it's worth delving in to.

    I understand the best option is to offer the landlord a company let however what is the legality of this on a mortgaged property?

    A bit of a vague question as each mortgage is different.

    I'm trying to gage whether anyone has done R2R on a mortgaged property, if so, how they got around this and the legals?

    Any advice is much appreciated!

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    Hi Jeremy,

    Rent to Rent only works legitimately on freehold houses with no mortgage on them.

    R2R on a leasehold flat and/or properties with a mortgage on them will be a breach of the lender's Terms and Conditions.

    The landlord could write to their lender to ask for permission, but it is doubtful it would be granted.  BTL mortgages and residential mortgages are issued for the undertaking of specific activities, and R2R would not be included in those.

    It will also be a breach of the lease, may of which contain a "no sub-letting" clause.

    It will also invalidate the property owner's insurance.

    ​Hope that helps?

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    Hi Vanessa,

    Thanks very much for the quick response.

    I am currently operating HMOs through a limited company and looking to expand my horizons and get into other property ventures, if R2R is too risky what would you suggest to be alternative to HMOs that would turn a decent profit? 

    Much appreciated.

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    Hi Vanessa,

    Greatly appreciate your response, will definitely do some research into your suggestions.

    Thanks again!

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