Browse All Tribes or choose a Tribe below:
By signing up I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Sign Up With Facebook, Twitter, or Google
By signing up, I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Don't have an account? Sign Up
To reset your password just enter the email address you registered with and we'll send you a link to access a new password.
I have advertised my 4/5 bed house for family rental. Someone running several HMOs have approached.
They intend to take property for 3 years and run HMO (paying me asking rental). They will do required work to change fire doors, alarms, some redecorating etc. No structural change in the property.
What are the disadvantages of letting my property for HMO instead of a family please? Anything I need to be concerned of?For example, what if the HMO company is non-compliant. Is that risk to me as property owner?
Will I need to draw a special contract. Currently property is advertised on openrent and they are going to do contracts.
This sounds like a Rent to Rent company.This is a very high risk strategy for you on a number of fronts.You have been targeted directly via OpenRent which is a strategy taught by property gurus to find "tired" landlords who will be naive enough to hand over their property to someone with no experience, no track record, and no competence.Therefore, there is a high probability that this is someone fresh off a "no money down" property course, who has little financial back up. Their claims to be able to guarantee the rent are probably false.To get a true picture, ask for their company registration number to see when the company was incorporated. (This should actually be displayed on their website, and if it isn't then that is a red flag imho as it is a legal requirement).As they are undertaking property management, they need to be compliant to lettings agent standards so should also ask with independent redress scheme they are a member of and the registration number. If they are not a member, they are trading non-compliantly, and you have no route of redress if things go wrong, not to mention that it is a big red flag.If you have a BTL mortgage, this activity will be a breach of the T & C's of your mortgage. You will also require specialist insurance.As the landlord, you are liable for any issues of non-compliance opening up yourself to very significant fines. Another significant risk is, if the Rent2Renter cannot let all the rooms, they can simply walk away leaving you with what is probably a delinquent HMO and tenants you have no commercial relationship with. Or, if the money gives them stars in their eyes, they can simply keep the rent and not pay you. There are reports of this happening all the time and many landlords end up with a big mess to clear up.But the short answer is - I would not touch this with your barge pole, let alone mine.See - Introductory R2R template letter to landlord?R2R couple claim they will be making millions
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Disclaimer: I have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences.
Slightly harsh. This maybe a perfectly viable business. I'd say of course do you Due Diligence. The person has other HMO's, according to what he's already said. Simply, verify this and what use is the HMO's used for, in housing Students, Homeless, or professionals etc.You can obtain HMO lists from council to see if he is licensed depending on the amount of rooms etc. If he's Managing your property then of course he should be accredited, as if he were a lettings agency.Remember, the Terms, Conditions and Clauses are all in the contract, which you and your solicitor would go through before signing. This is there to protect you and the Leaser/Renter.
Disclaimer: I have also have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences.
I am sorry you think it is slightly harsh. I've seen the "scripts" given to newbies to use when calling landlords and agents and it says to tell them that you have other HMOs and that you are a landlord and have so many tenants, you have to get properties off other landlords, or that you are a relocation agent with too many tenants etc.It is plausible that there could be some deception involved in order to get people to hand over properties, otherwise how can someone with no track record, no experience, and no competence be getting hold of them?Of course, there will be some doing it legitimately and have sufficient cash funds to guarantee the rent, even if they cannot fill the rooms, but they are probably in the minority. As ever, due diligence will protect you from someone who is not all they claim to be ...
Well said. I am in agreement with this. Although, there are fraudsters out there and you'll find that in any business. I would always do my due diligence before handing over my keys. There are now much better landlords, property management companies and commercial leasers because of the new laws like licensing of HMO's etc. So I would say, the good ones are on the rise. Point is Due Diligence and Contracts is what they should be focused on with a good solicitor in place always.
Common Sense is the key.
Agree, but should point out a contract is worth nothing if someone has no funds against which to claim if they end up in breach.
I'd say; one shouldn't enter into a contract if this is the case. Forward planning is advisable, just in case. Always, make sure you know what you're entering into with your solicitor.
In A House Ltd
RLAAS Accredited Landlord
Thank you for your enquiry.To be clear, I don't have any hostility towards Rent to Rent. What I do have is concerns about the thousands of people paying for expensive training courses to learn how to undertake this strategy, without being made aware of all the many stumbling blocks.I think this thread will better explain my view:Rent2Rent - what trainers fail to tell you Hope that helps clarify my position?