Rent to rent on BTL mortgaged property

Rent to rent on BTL mortgaged property

10:59 AM, 29th March 2015, About 8 years ago 5

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I have a friend who would like to rent me their buy to let property with a view to me using it as a small HMO. Rent to rent on BTL mortgaged property

I purchased the Property118 rent to rent lease agreement and it’s fantastic and I have used it on deals where the owner owns the property outright. However, the latest deal has a BTL mortgage on it.

Does anyone have any advice as to how this deal could be achieved, would a licence of some sort be the way forward?

I have a long standing business career with this friend and am certain that he will stick with his word and let me rent the property for 5 years, but I am concerned to ensure that we don’t offend his lender in any way.

Thanks again for the great service provided by Property118



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Mark Alexander - Founder of Property118

11:15 AM, 29th March 2015, About 8 years ago

Hi Andrea

Thank you for your positive feedback on the Rent to Rent lease agreement which was drafted by solicitor Justin Selig at The Law Department. I will make sure he is aware of your comments.

There is a way to structure the deal that you are considering but it is not without it's challenges.

Effectively you will need to set yourself up as a letting agent. This will involve you becoming a member of a redress scheme such as The Property Ombudsman, Property Redress Scheme or Ombudsman Services. To obtain membership you will also have to purchase professional indemnity insurance and familiarise yourself with their scheme rules. It is unlikly to be cost effective for one deal.

The basis of the agreement between you and the owner would be a management agreement. Northwood lettings are specialists in this market and have a tried and tested business model. I suspect their agreements are about as good as they get so they would be a good basis for any lawyer drafting one for you to begin with as a starting point. However, expect to pay at least 4 figures for an agreement of this nature to be professionally drafted for you.

If you intend to do a lot of deals of this nature it might be worth progressing. Just a word of warning though .... there are dozens of self proclaimed guru's out there teaching wannabes with no money how to do deals of this nature. They charge a lot of money for so called "education" and no doubt provide management agreements as part of the package. I can't speak for them all of course but of those I've seen personally the agreements they are advising people to use are not worth the paper they are written on so be VERY careful which agreements you use and have a good solicitor like Justin Selig look over anything that you are offered.

I am hopeful that Justin will eventually get around to drafting such an agreement and guidance notes for sale on Property118. There have been hundreds of his rent to rent lease contracts sold already so he knows there is a market for them and I suspect he's well into profit on the leaser contracts, even though they are being sold so cheaply!

Good luck whatever you decide to do.

Av Mind

15:04 PM, 11th May 2017, About 6 years ago

Hi Mark,

I have recently, since becoming interested in starting a business in rent to rent, been perusing the articles that have been written on the forum.

If I may first take a minute to thank you for your website and also to compliment you on the well balanced and professional manner with which you express yourself. I thoroughly enjoy reading your comments and the comments of many other forum members.

Onto my question; The first step to starting the rent to rent business was to get the most professionally drafted contract available. To this effect I will hope to buy the contract you have had written by Justin. My only reservation is that is seems from the comments above that this contract will be no use for a BTL property. Is this correct? and if so is there a contract at present which covers BTL as well ?

Neil Patterson

15:27 PM, 11th May 2017, About 6 years ago

Reply to the comment left by "Av Mind" at "11/05/2017 - 15:04":

Hi Av Mind,

Yes the contract written by Justin covers BTL 🙂

Please see >>

If you operate a “Guaranteed Rent” business model (AKA “Rent to Rent”) and would like to purchase a professionally drafted lease to offer to property owners then look no further.

Having recognised a need for this contract template we teamed up with specialist commercial property and contracts solicitor, Justin Selig of The Law Department which is regulated by The Law Society.

The lease contract templates, guidance notes and notices are now available for immediate download for just £97 exclusively via

The reason the contract templates are so competitively priced is due to economies of scale, the real cost of drafting a contract of this nature is thousands. Sufficient pre-orders of the contract template via Property118 made it viable to produce the documents and to share costs to arrive at this incredibly low figure.

If you are a property owner and you are being offered a “Guaranteed Rent” deal which allows your tenant to sub-let then this lease template is also for you as it protects your interests too. If your tenant wants permission to sublet and you’re being offered a Company Letting Agreement or an Assured Shorthold Tenancy, that’s the wrong contract and should sound warning bells.

Paul Harsley

20:31 PM, 31st December 2018, About 4 years ago

Reply to the comment left by Neil Patterson at 11/05/2017 - 15:27
Hi Mark, does this include properties with a mortgage and standard BTL landlord insurance in place? I.E is this more of a management contract with guaranteed rent rather then a lease?

Mark Alexander - Founder of Property118

8:52 AM, 1st January 2019, About 4 years ago

Reply to the comment left by Paul Harsley at 31/12/2018 - 20:31
This not a management contract, it is a lease template which provides for subletting

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