Updating post from Reddit.
We see it daily on here where landlords or youngesters are being sold the dream of rent2rent scams. Anyway I was just reading the rent reform breakdown on nrla and spotted something that I havent seen discussed on here which should lay to bed the whole rent2rent and that is liability.
Once in force, the Bill will also extend rent repayment order liability to superior landlords. This means if a rent-to-rent operator commits an offence (including failing to obtain a licence for a licensable property or continuing to offer fixed term tenancies), a superior landlord will be able to be pursued for up to two years’ rent.
In other words any property owners will now be liable for all the mistakes that a rent2rent landlord can make. This sounds like a huge factor that should put owners off ever wanted to take on rent2rent landlord.
They also can't guarantee vacant possession
Which means, your looking after tenants they put in on their terms, or pepetual contract with R2R'er you cant end.
Yep - bit of a scary prospect
Thanks!!
never a good idea in the first place to let your property to a rent2rent scheme as the risk is signficantly higher for barely any better rent. Save yourself the trouble.
Hey what's the issue with rent2rent generally? I was seriously considering it a couple of years ago and asked a friend of the family who had been a landlord with a very large portfolio, he said don't do it. So I didn't but he didn't really explain why.
This op pretty much clears one major reason. Why would you want financial liability over something you have no control over.
Lets say you are happy to take on that risk (which really should have put you off) then you have the issue of most rent2rent landlords like 99.9% of them are only in it for the fast cash without risk. Imagine if a tenant stopped paying rent to their landlord. You bet out of those 99.9% rent2rent landlords will just do a runner leaving you with a tenant who is not yours so how do you evict?, no money coming in as per the agreement. All that headache is usually the big no to rent2rent schemes.
The big scam is those offering to train people to get into rent2rent so all these tiktok/facebook reel influencers will rent flash cars etc. pretend they are living the high life then explain you too can by starting a rent2rent business. Only problem is they charge you like £1500 for a udemy course which basically says approach a landlord, tell them you want to rent to rent and can make them money for no risk!! 🤣 Then you need to make the sale by saying anything crap like oh we promise to renovate the property and do maintenance.... With what money 🤣 most landlords who dont fall to scams will just shut down at anyone approaching them. The others who are not sure will come on here and ask why it is bad idea. Only one might be stupid enough to go through with it and find out the hard way why its bad.
I mean there are genuine sort of rent2rent companies but these are usually big corp landlords dealing through their many corp friends. Like small time landlords will ever be included in that clique.
Councils try it too with promising to pay good money for 3 years if you house someone on benefits then they are also known to leave you stuck when things go south.
I think there is also issues with btl mortgages and insurances not being covered so again only really suitable to landlords without finance and like risk for risk strategies as i cant really see any pro to rent2rent. All it does is potentially makes the middleman rich when times are good but they can run off to the sunset when the issues start like maintenance requests and rent arrears/damage.
Edit: found this which backs up all those points https://www.landlordstudio.com/uk-blog/what-is-rent-to-rent-and-is-it-legal
Thank you very much for that, glad I didn't do it
Yeah it is always sold as the dream but rarely ever is.