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  • Rent-to-Rent

    Rent to rent (to others)

    I am an italian guy living in London and I got aware of the flats business around here and got interested in. I was thinking to invest some capital in houses, but as I don't have a letting agency or something like that, I wanted at first just rent some flats in my name and then rent them out to other tenants. Do you think this is possible and legal? Anyone familiar with this business model?

    Hello everyone first of all...I did a copy and paste...Cool
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    Google "rent to rent" or "rent 2 rent" and I'm sure you'll find lots of discussions on this. In fact there was a long thread on this forum not long ago.

    If you are the tenant and are subletting with yourself as the "landlord" then it's dodgy and probably in breach of mortgage and insurance conditions, as lenders and insurers usually want the tenancy contract to be directly between the owner and the person occupying the property.

    However, if you act as property manager / agent on behalf of the owner, offering them a fixed monthly rent and relieving them of the hassles of finding tenants and most aspects of the maintenance (in return for you getting to keep the profits) then it can work. Francis Dolley's "Multi-let without the sweat" uses this approach.
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    [Image: 75pxLogo.jpg]

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    Sorry for bumping an old thread, but I believe this post is still relevant to today's market.

    When the middleman acts in the capacity of a management agent rather than a tenant, that's when you have a MANAGEMENT agreement as opposed to a TENANCY agreement, will that result in the rental profits becoming remuneration for a service performed and therefore attracting VAT?

    Thanks for any input in advance.

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    The long discussion about Rent 2 Rent was >>> here.

    As Lynne rightly points out ... the devil is in the detail (as always).

    You must also ensure that you are not straying into HMO territory when subletting rooms to un-related people.

    There are a number of people teaching R2R who seem to gloss over some of the most important details, or do not provide answers when challenged.

    Please be very careful about engaging with this strategy until you fully understand how to set it up in a legitimate and ethical fashion.

    There is another R2R discussion >>> here.

    Also bear in mind that much of the technical set up of R2R has not been tested by the law and some of the risks are therefore not fully understood or known..
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    Thanks Ladies...I had a look at Francis Dolleys strategy and it seems to be the same method (must check details of course, as you said...). We had a small chat by email but he finally ended up proposing his course in fact...
    Well about HMO, the majority of people I know they live in multiple let properties, I mean they're not from the same family and either one of them has his name on the contract and then sublet or all of them are on the contract and pay the rent. I don't know anythink about peculiar laws or insurances regulating this... I should have a wide look at the range of contracts. Can you suggest any book about this?
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    According to me there are many rare cases where already rented property is given on the rent. Because many of the owners does not allow this.
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    R2R can work rather well when the investor has direct experience gained through living in an HMO (all multi-lets are legally HMOs; license or not).

    You need to understand what the tenant profile will be in the specific area. The standard expected and what makes for reasonable wear & tear. A friend does very well and a person who I no longer see contributing on PT lived in his own property until he reached a high level of success. Vanessa is another example of an owner occupier with roommates.

    Where R2R becomes a challenge is on the contract side. The laws and the existing market practices for insurance or mortgages are not designed for R2R. Lots of little details that can trip up the investor trying to make it work well. It can be done if you work at finding the right situation.
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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.


    Generally, this means you're unlikely to need building insurance if you're renting. .
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    Sorry for bumping an old thread, but I believe this post is still relevant to today's market.

    When the middleman acts in the capacity of a management agent rather than a tenant, that's when you have a MANAGEMENT agreement as opposed to a TENANCY agreement, will that result in the rental profits becoming remuneration for a service performed and therefore attracting VAT?

    Thanks for any input in advance.

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