Rent to Rent for Serviced Apartments

Rent to Rent for Serviced Apartments

11:10 AM, 19th February 2016, About 6 years ago 12

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I am starting to talk to landlords about rent to rent. Ideally I want to create a serviced apartment from a rent-to-rent to rent

My questions are as follows:

Would I (or the landlord/ owner) need to change the use of the property to Business Use C1? If so, would this affect their mortgage?
If the use changes, business rates would apply which could be re-gathered from small business relief scheme – however, with ownership being in the landlords name, how would this be done?


If no change of use is needed, and a more simple rent-to-rent contract is required, would this type of agreement leave the bandwidth to run the property as a serviced apartment?




Neil Patterson View Profile

11:25 AM, 19th February 2016, About 6 years ago

This is not an area of expertise for me personally, but please do see our Rent to Rent tenancy agreement >>

Gary Dully

17:43 PM, 19th February 2016, About 6 years ago

Hello Jack,

To see if you would need a change of classification, simply ask the local council, they will tell you, especially the planning department.
Class C1 is commercial, not residential (you already know that).

Chances are that the current owners mortgage would be affected, as the type of business will have changed that it is being used for, from residential to commercial use.

On a rent 2 rent, you are under the terms of a tenancy agreement and / or a management agreement with the owner.

I have management agreements for some rent to rents and I have done all sorts to them, but it was agreed at the start of the contract what we would be doing in the Heads of Terms, instructing the solicitors.

That being said, after two years I have never heard from the owner, lender or anybody else as the owners mortgage is always paid on time.

I haven't done serviced accommodation yet, but I suppose, it disposes of the problem of 'Clause 24' if the original owner has a change of use permitted, (but check with your accountant).


9:03 AM, 20th February 2016, About 6 years ago

I have done this and generally provided it is one single dwelling at any one time there is no requirement for a planning change. But check with the applicable council as they are not all the same.

However, you will need the permission of the freeholder, the leaseholder (your landlord) and management company if there is one and confirmation that any lender is OK with this, which is unlikely. I know this as I am trying to remortgage mine (currently unencumbered) and there are only a very few obscure lenders. It is also unlikely the block buildings insurance will cover it and you might have a job getting them to change it.

How does one apartment come into a rent-to-rent situation? that is usually for HMOs isn't it?

Jack Gooding

9:26 AM, 20th February 2016, About 6 years ago

Reply to the comment left by "Gary Dully" at "19/02/2016 - 17:43":

Thanks Gary..would it be possible to share any information on the types of agreement away from this thread?

Your comments very useful.

Gary Dully

2:36 AM, 21st February 2016, About 6 years ago

Reply to the comment left by "Jack Gooding" at "20/02/2016 - 09:26":

Hello Jack,

By all means contact me, I don't mind sharing or networking.

Rehan Gul

9:39 AM, 30th March 2017, About 5 years ago

Hi Gary,
I am looking for rent to rent contract for Service Accomodation like Jack above. Would you mind I network with you offline?


15:20 PM, 8th August 2018, About 4 years ago

Reply to the comment left by Gary Dully at 21/02/2016 - 02:36
Hi Gary,

Would you be able to offer advice on serviced apartments rent to rent? I was being given below offer from **COMPANY NAME REMOVED BY MODERATORS**, is this a good offer? I don't have much experience in this area.

This can be a hands off rental property investment managed by a highly experienced management company if required.

• Active SA in high demand
• Excellent condition throughout
• Close to local transport links

Approximate room rate per night - £210
Rent payable to landlord per month - £2600 (all bills included)
Income based on 70% occupancy circa - £4459

Our Fee - £10,995

Full Management - ( 20% if required )

Mark Alexander - Founder of Property118 View Profile

16:04 PM, 8th August 2018, About 4 years ago

Reply to the comment left by Magda at 08/08/2018 - 15:20
20% full management fee is ludicrously high, as is the finders fee.

If this is any reflection of the rest of the deal, I wouldn't just walk away, I would RUN!


16:50 PM, 8th August 2018, About 4 years ago

Reply to the comment left by Mark Alexander at 08/08/2018 - 16:04
Thank you so much! Would you be able to recommend a good investment property company offering rent to rent?


13:45 PM, 10th August 2018, About 4 years ago

Reply to the comment left by Mark Alexander at 08/08/2018 - 16:04
20% is not atypical, it reflects the commissions charged by OTAs whose business I expect they use plus housekeeping costs

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