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To me you come across as savvy and in survival mode. A different thinker. We all approach property here from different angles. You do what feeds your ambition, personality and ability to pay your bills. You need your reward to reflect the energy you have expended.
Good luck to you.
The only problem I have with what you are proposing is:
viewing other properties with potential for letting as either a short term let
I won't use an AST
How will you be ensuring a tenancy isn't created in these other properties? If they pay rent and have exclusive occupation of the property/a room (if you put clauses in the contact saying you have the right to enter the room but don't actually do so then it will still be a tenancy). You can only create a excluded licence/tenancy where you/a member of your family are resident in the property as your main home immediately before the tenancy starts and also when it ends and there are shared facilities. This means you would need to switch your home (council tax, bank statements, utility bills etc) each time you want to move a new tenant in or they are leaving.
If you do correctly setup a non-excluded licence, what do you see as the advantages over an AST? There are only 2 that I know of. You have a slightly shorter notice period for a licence (4 weeks+ rather than 8 weeks+ but no accelerated possession so might not be quicker) and you don't need to protect the deposit. You need to weigh that against the potential that you didn't setup the licence correctly and need to start the eviction process again, plus have to pay 3* the deposit
I'm happy to use a licence or a tenancy, but not an AST. There are several situations where a tenancy can be created but an AST can't be used:
That's enough options to choose from. It's less important whether or not it is excluded but the first 4 are likely to be excluded tenancies/licences.
2 questions I have not found the answer to are:
I'm sure the answers are defined somewhere as it doesn't actually occur, but I haven't found them.
A good teacher must know the rules; a good pupil, the exceptions.
Martin H. Fischer
I'm happy to use a licence or a tenancy, but not an AST.
Whilst I understand your strategy, the bit I don't get is why "not using an AST" is so important to you. For myself the tenancy agreement aspect of strategy is so low down my list of priorities it barely even features. I think you're probably the only person from the huge amount of business people I know who even mentions it!
Not knocking you at all, just curious as to why it bothers you so much?
A bad experience with my inherited property.
The property was placed in trust until my 50th birthday and the trustees appointed a lettings agent on a fully managed basis. I was completely hands off and was waiting until my 50th. Other than lodgers I had no landlord experience. I was informed by the trustees when the tenant was 6 months in arrears. I contacted the letting agent directly and asked what could be done as the trustees were not taking any action and they advised starting the eviction process. This took a further 10 months. As the tenant was being moved to emergency accommodation there was nowhere for personal belongings so the bailiffs/agent placed them in the detached garage. It then took another 3 months to get them removed.
During this process I decided I needed to learn a bit about property letting. I learnt that lodgers and tenants were different and initially thought I would stick with lodgers. I then learnt about HMOs and realised it wasn't that simple. This prompted me to learn about any aspect of property rental I could find, hence the purchase of a mixed use development with a commercial let. But I still don't want to try the AST again. I also won't use trustees again.
Painful story, but I think it illustrates poor trustees and a poor eviction process rather than ASTs being inherently wrong.
The eviction process is about to go through a huge shakeup anyway.
I agree that the AST isn't inherently wrong and that the eviction process attached to it is no longer fit for purpose and needs review. It also concerns me how other legislation is associated with the AST and the rate at which this is changing. Non AST lets appear to be much more stable.
As a non AST landlord I will need a CP12 if there are gas appliances. If I'm not resident I'll need an EPC. GDPR compliance has been introduced for all businesses. That's about all that has changed in the past 2 decades (I haven't forgotten RTR checks but they're England only and I'm in Wales).
I believe that if I create something that works for me now it will remain mostly unchanged for 10 or even 20 years and still be viable. I don't have that confidence with the AST.
Regarding your questions on those staying in hotels, my local council considers anything over a 6 week stay as being the point at which a guest becomes a resident, this is used by the council to prevent hotels offering longterm emergency accomodation which in the past has led to massive problems of antisocial behaviour and overcrowding.
However wether your local authority would take the same view or choose to invoke it is another matter, though if it means getting licence or council tax revenue they may well take an interest.
As for your “what have i become” , so long as the accomodation is fairly priced, of good quality and meets your tenants needs i see no issue, you’re keen to find a business model that works for yourself and your goals, crack on. just make sure you’ve got all angles covered and have identified any potential pitfalls.
A hotel provides services such as cleaning the room. The occupier does not have exclusive access. So they can not be a tenant.
I agree, yet I often read of warnings with serviced accommodation (which follows the same principle), that care must be taken not to create a tenancy. Having said that I've not yet found an example where a tenancy has been created, whilst the service has been provided.
On the other point, I've not found anything on why hotels don't require an HMO license for students and/or migrant worker bookings.