Zoopla, Rightmove and online agent Tepilo are all advertising rent-to-rent properties for sale.
Zoopla was yesterday listing two in Lancaster Gate, London, one at £19,000 and the other at £20,000.
Both are described as offering profits of £17,835 a year.
The £20,000 property is on the market with Tepilo, and the £19,000 one is listed by Simon Real Estates, which said that its apartment had “disabled features”. The firm also described it as a “hands off rental property investment managed by a highly experienced management company”.
Tepilo gave a rather more sparse description of its property, but used the same wording to describe it as a hands-off investment.
On Rightmove, two rent to rent properties in Sussex Gardens were listed yesterday. One was the Tepilo one, with another at £19,995 listed by Golden Properties.
EYE has previously asked Zoopla about listing rent-to-rent properties. The listing in question appeared to be pulled, but then to go live again.
Yesterday, Rightmove thanked EYE for drawing the listings to their attention and said it was conducting a review.
Russell Quirk, whose Emoov group now includes Tepilo, said he would look into it.
There is of course no suggestion that the properties transparently listed on the portals and by Tepilo involve any kind of illegality, or represent anything other than a worthwhile investment.
However, rent-to-rent is a difficult and potentially illegal area, in that it has become notorious for scams, when unsuspecting landlords and agents have no idea that a property is being sub-let – sometimes by a ‘tenant’ who does not live there, and who has also become the ‘landlord’.
Lenders, insurers and freeholders do not generally allow allow sub-letting, and most specifically ban it.
I thought the Law in London prohibited short term letting for more than 90 days a year so it is difficult to see how these rooms can be so profitable without breaking the Law ?
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It would take a special kind of mug to buy such an ‘investment’. It takes a special kind of idiot agent to agree to list it.
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I still don’t get how this works, or how it is possible? If the owner agrees to allow someone to ‘rent’ the property, just to rent it out then they are the special kind of idiot as surely it would be a better financial plan to just rent it out yourself.
And if the owner doesn’t know their tenant is renting it out then the listing agent (and original letting agent) is a shady POS for not getting the owners permission and not visiting the property.
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A few years ago my son went to Australia and wanted to rent his house. A friend was trying to set up a room letting business and so wanted to rent my son’s house on a three year tenancy. My son got the going market rent knowing that as he was do far away he would not have to worry about changes of tenancies etc until he came home. The friend sorted out proper sublet contracts and insurance which covered the sublet. MY son got paid market rent but rented the friend rented out rooms individually so got a lot more, but had expenses of gardener cleaner etc. It worked for everyone….apart form my son came home after a year and had to rent a house for two years as he couldn’t get his back!!! But in theory it worked well. Another reason though why three year tenancies would be problematic I believe if they were brought in as standard.
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Country Lass – we regularly get enquiries from R to R merchants who genuinely believe that what they do is a perfectly acceptable business practice. When we call them slimy, pernicious, scum-bags, they get very offended and ask for our formal complaints procedure. Generally though, after we’ve given them the number of the local trading standards office, we hear no more from them.
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Sounds fair enough to me!
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I came a cross a couple recently which are doing this. They find properties and ‘manage’ them.
They had no idea what they were doing, just saw it a free money.
Pay a £1000 for a property and get £2250 in rent for it.
OPA – Other peoples money.
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