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  • Rent-to-Rent

    Rent 2 Rent - I am having a "blonde moment"!

    There's a lot of talk about Rent 2 Rent as the exciting new strategy.

    I've worked in the numbers in our home town of Guildford, and no matter which way I stack them, there just appears to be very little net profit involved.

    I would therefore like to hear of actual examples of people who are achieving reasonable net cash flow from rent 2 rent.

    Please be so kind as to state the area, number of rooms, single occupancy rent, rooms rent, and all expenses so we can see the net profit.

    Also, if you are taking on a property for Rent 2 Rent, do you let the owner know?

    What sort of tenancy agreement or room licence do you produce as you are not the Landlord?

    As the devil is always in the detail, what other things should I be considering that may catch me out?

    I am keen to explore this so hope peeps can shed some light.
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    Hi Vanessa There is a lot to cover.

     It is essential to build up a relationship with your local agents I work closely with Martin and Co Doncaster and Galley Estates .

    The owner does need to know I also think you should have a local solicitor who can advise you of any legal issues .

    As for the areas in which it can be done as is the same with agreeing any deal it's about what a landlord is willing to accept on a guaranteed long term basis that will decide if a deal dooable .

    Also in some areas you do not need a communal room as you would in a University Town so you may have another room for rent depending on size and what your local HMO department will accept .

    Article 4 does mean that in those areas your target is existing landlords with HMOs that are licenced .

    Many University areas have article 4 Doncaster doesn't so works well for me . Dealing with LHA is a skill in its self which we cover and isn't for everyone although there are plenty of graduates and workers or over 25s lha. Hope that helps. Kim

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    Thank you Kim. Can you at least explain about the tenancy agreement? Is the sub-letter allowed to sign one as they are not the Landlord?

    We must organise that PT TV interview with you to find out more.

    Could you summarise the pro's and con's of Rent 2 Rent for us?

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    Hi
    If you go to https://www.kimstones.co.uk you will see some testimonials .

    I take landlord properties some are tired and need a light brush up rent on a long term basis either via the agents who will put you/me on an ast upto 35 months with permission to sublet . I have 9 via Martin and Co a large national lettings franchise who afe happy what we do and he way we do it ..got a call Friday to view another 2 next week . We are looking at doing the deals upto 5 years via the agents although this is a different contract/lease . Going direct to landlords I use a rent guarantee contract upto 5 years.

    I make my net profit by renting each room I agree to pay for any damage ( although that is negotiable) I don't pay deposits ( although I would for the right deal) I sometimes would also offer to buy a new boiler..for the right deal .
    I have looked a other areas and found that In most it's dooable although that depends on the ability of the person to negotiate the deal..the same as anything in the property world Or any business world really . Was speaking to Ian English who is doing this in Tonbridge Wells one of the UKs most expensive Towns!!
    We have taken advice from solicitors who advise us what we do is fine I advise anyone who attends my course to take their own advise and have a good solicitor as part of their power team the same as in any business I also keep an eye on any changes or developements which may mean we adapt what we do and the way we do it as you would in any business .

    HMO Rent to Rent isn't for everyone it's making us a lot of net profit and can be achieved quickly we also work with lha and many charity organisations if lha doesn't suit you focus just on graduates and workers we have many Polish Latvians and recently Russians all of which pay on time and are polite and clean..unlike many lha English lol . HMO Rent to Rent can also work well in non University Towns/and University Towns the figures can work better as a communal room can sometimes be used subject to sizes and how the house is configured.
    Hope this helps.

    Kim

    https://Www.kimstones.co.uk HMO Rent to Rent Course Saturday 20h October Doncaster call 0800 6335 333 to book
    Places which are limited to maximum 20
    Call direct 07979690484 Kim Stones.
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    Vanessa, While I am not sure Kim if providing the detail you asked for, the message seems to be a deal stacks up when it stacks up. In other words, if you as the investor can interest the building owner into a rent to rent deal then you might have a winner.

    You need a rent that is low enough that you can make a margin.

    That likely means negotiating so the owner is being paid below the market rate and they accept that as a trade-off to the hassle and the vacancy costs.

    Similar to how local councils will rent a property for 60% of market and they take on the property for 5 years with all maintenance and other things included in what they do for the owner.

    When I ran the numbers of some of the deals, 60% could be entirely fair if you look at the real operating costs and factor in the vacancy cost plus take off about 10% for hassle.

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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.


    John you are a very good writer you explain things very well .

    Kim

    https://Www.kimstones.co.uk HMO Rent to Rent Course Free Download book places call 0800 6335 333 Saturday 20th October
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    (11-09-2012 09:01 AM)KimStones Wrote:  John you are a very good writer you explain things very well .

    Kim

    https://Www.kimstones.co.uk HMO Rent to Rent Course Free Download book places call 0800 6335 333 Saturday 20th October

    Thanks.
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Thanks to John and Kim for their input.

    I am surprised at the lack of interest in this topic, as it seems to be the new "big thing".

    It is being discussed in more detail on Property118 for those who want to know more.

    Rent to Rent under the microscope

    Of course the devil is always in the detail.

    The National Landlords Association made this comment:


    The issue of which type of agreement to use for let-to-let agreements is perhaps more complicated than some of the above commentators have implied.

    The agreement between the property owner and the managing company (in the middle) will usually be a non-Housing Act tenancy, effectively a standard business contract.

    The subsequent sub-letting agreements between the property management company and the tenant can take the form of an AST. Both parties entering into an AST will benefit from the statutory protections in place.

    While this may well work in the majority of cases, property owners should be careful that let-to-let
    arrangements don’t result in tenancies which they may not have chosen themselves and tenancies that cannot be easily brought to an end, should the manager breach the contract.


    And this comment from "Anonymous"....

    Interesting but potentially fraught with problems, certainly lot's of unanswered questions here.

    Who is legally responsible for all of the tenants deposits, the property owner or the landlord who is subletting?

    What happens if the boiler breaks down, i.e. who pays for it?

    Which landlord is responsible for gas safety check? Both presumably?

    Do both landlords need to get an EPC?


    Anybody teaching or preaching this strategy should surely have the answers to these questions and also have bullet proof paperwork.
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    This is an area I know little about, I'm afraid. I can see advantages for the owner who wants a hassle free deal and the person wanting to let it as an HMO without having to fund a deposit and mortgage. Surely, providing the deal is right for both parties and they are honest with each other there's no reason it can't be successful.

    "HMO Fever" seems to be gathering pace in our area, especially as student numbers are down - I just hope there are enough tenants to go round!
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    Hi

    I have chosen to go down this route having a lot of success although I do recognise that people considering rent to rent will want every box ticking sometimes you just have to make a judgement . My confidence does come from that I have 9 properties via Martin and Co who sign me up on an ast I then sublet on a room by room basis using a licence . I have recently been advised that this can be done using an ast..it's a grey area but not something that holds me back . Martin and Co are looking at using leases when I take properties from them we shall see . If anyone on PT comes up with a definitive answer I will naturally listen and adjust accordingly my documents are fine but if things change I will change with it and that's the advise I would give anyone else . I aim to continue aggressively growing my HMO Rent to Rent business .

    I buy any new boilers that need replacing..

    I pay for any epc required...

    I gas check all the properties I pay for this ...

    I don't take deposits although you could..

    I pay for all repairs .

    I also buy and invest in HMOs we have 16 rent to renters and 11 HMO,s / multilet houses .

    Kim. https://Www.kimstones.co.uk HMO Rent to Rent Course Doncaster Saturday 20 th October call 0800 6335 333/07795411759 to book places .
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