Rent to Rent for Serviced Apartments
I am starting to talk to landlords about rent to rent. Ideally I want to create a serviced apartment from a rent-to-rent agreement.
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?
‘OR’
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?
Thanks
Jack
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Use of periodic tenancies in Scotland?
Member Since July 2017 - Comments: 462
6:00 PM, 12th August 2018, About 8 years ago
Google the Association of Serviced Apartment Providers. This gives providers for most areas of the country. They will take over your apartment and furnish it for you. They pay fuel bills and council tax. They will pay you a fixed monthly rental figure. You decide whether you want 1, 2 or 3 year contract. They take the risk as to how many nights per month they can rent it out for. In the example figures you quote they might pay you £2,600 p.c.m. but charge you no fees. They gamble on making sufficient excess over what they pay you to meet all their overheads and give them a good profit. As regards maintenance you could easily find a company to do this for you at reasonable cost. In my experience, and I currently have 2 properties each with a different SAP they will often arrange minor repair themselves if I wish and just add on a modest 10% admin charge.
Member Since August 2018 - Comments: 3
2:50 PM, 13th August 2018, About 8 years ago
Reply to the comment left by Puzzler at 10/08/2018 – 13:45
Would you consider it worth investing then? I have been advised that occupancy doesn’t fall below 70% and I will definitely make profit. However I just find this deal non binary as I am the only one who legally agrees to not only paying 11k fee, but also to cover over 2k rent for X amount of years. I have no guarantee occupancy will be fulfilled.