15:02 PM, 7th January 2020, About 2 years ago 18
Rent-to-Rent (R2R) is taught in many property training courses, but what they don’t tell you is that the paperwork is not so straightforward, especially if they are used as HMOs. And yet I get letters every week from companies wanting to “ease this burden” and run my HMOs for me.
I would be grateful for advice from those who have properly overcome the following objections and issues, please:
1. Mortgages – R2R is considered by lenders to be sub-letting, and not many like that, so might pull the rug out from under the owner/borrower. Many don’t allow HMOs unless all rooms let on a single tenancy agreement (this is fine for student housing, but not for working tenants).
2. Insurance – likewise many insurers (including the big ones usually recommended for portfolio landlords) don’t like subletting.
3. R2R agreement (between the owner and the R2Renter), to try to show that it is a single let (for mortgage and insurance) and yet allow them to run the R2R/HMO. Does anyone have a solid R2R agreement?
4. HMO licensing (might be the easiest to answer) – is the HMO Manager (as shown on the license) the owner or the R2Rer? Is the R2Rer an agent or a tenant (if she/he doesn’t live there)?
Many thanks, and HNY2U all.
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