In principle a rent to rent business appears quite straight forward, however there are a number of roles and responsibilities for the operator. They are not onerous in themselves, but if you get it wrong, they could put you and those around you in a very serious position, so it is important to understand what they are. 

Broadly speaking, they can be broken down into five areas and in each are a set of legal responsibilities, legislation and rules for you to know about. 

1.     Tenant management & duty of care

There is ever increasing compliance required for Landlords and you are legally responsible for ensuring that your house shares are safe and have all the correct and up to date certificates.

Creating and managing tenancies, taking and managing tenant deposits and serving notices require the correct procedures; you will need to know these and keep up to date, as they change regularly

Challenging situations between tenants within the house and occasional anti-social behavour can be very demanding 

Organisations such as the National Residential Landlord Association are an excellent provider of foundation courses which cover everything you need to know and we recommend them highly. As a member you will have access to telephone support where you can seek advice on specific issues. 

On a personal level, tenant behaviour can be challenging and it can be helpful to have someone with common sense and a no nonsense approach who you can share your challenges with.

2.     Property management

 Electrical, plumbing & heating systems, along with fire detection systems need to be serviced and maintained by qualified and accredited contractors 

Above and beyond those, there are lots more maintenance items which will need looking after. If you or your partner are practical, it can be a great help and it is invaluable to have a really good handyman to support you. 

Fixing some issues can be surprisingly hard sometimes and your tenants won’t always be very forgiving while you try to find the solution. Add to that, that the costs can add up quickly, and you will need to make sure you have contractors you can rely on and trust.

Having a good grasp of property maintenance helps to build confidence in identifying causes and solutions and there are online courses available which are a great way to build understanding and knowledge

It won’t always be appropriate, but Youtube is a great way to back up a little practical know how and learn some useful tips. Knowledge is power as they say, so power up with as much knowledge as you can, since when it comes to property maintenance, there is always more to learn.

3.     Landlord interests

 It is your job to make things as easy as possible for the landlord, and to do that, you need to understand their position:

This will involve getting an understanding for what finance they have secured against the property (if any) and making sure you do not compromise their position with the terms and conditions attached to it

It might be easy to overlook buildings insurance, but it is crucial that you understand the difference it makes when running a house as an HMO. Houses do burn down, and insurers will not pay out if the use of the property has invalidated the policy. You must bring to the landlords attention what insurance they need to have on the property, just in case the worst should ever happen.

Your contract with the Landlord needs to protect their asset, their interests and cover what you plan to do with the property along with the details of your agreement, in a way which is fair to both parties.

There is no quick or easy way to get a contract which does this. We had ours written for us (at quite some cost), and over the years have made incremental improvements to bring it to where it is today. At the very least, you need to understand the various clauses and make sure it is clear about who pays for what, and what happens if either party does not do what the other expects them to. 

Lots of Googling and reading is the best way of getting information without paying out £1,000’s in advice, but if you want a good contract, you will probably end up having to pay at some stage.

4.     Planning, licensing & building regulations

 For some reason planning & licencing often get confused. Perhaps because they are both dealt with by councils, or because both will take a different view, when a house is changed from a family single let property into an HMO.

Don’t be one of the confused people! Read up on what each department does in relation to residential property and in particular when it is converted from a family let (use class C3) to an HMO (use class C4 or Suis Generis).

Building regulations are legal minimum standards for the design, construction and alteration of buildings, and building control (which can be a council department or privately run building control service) will specify, inspect and certify that work has been approved.  There is cross over between this and licencing and you should have a basic understanding of the standards which are applied to HMOs

Again, lots of Googling and reading should clarify the difference between the first two (I’ve given you some terms to search there!) and the cross over with building regulations.

5.     Business management

 Understand how your business works in financial terms and set it up so that you can generate accurate reports which are meaningful.

If you haven’t run a business before, or if you have felt that you did not quite understand bookkeeping and financial management as well as you ought to have, this is the time to change that. 

It is quite easy to manage things while your business is small, but as it grows, if you are unable to run accurate reports and/or you do not know which reports to run and why, then you are not managing your business, and will risk everything.

Depending on your experience, find books and online resources which fill in the gaps for you, so that you will be confident in this important area.

When you decide to start your rent to rent business, if you also decide to become knowledgeable in the five areas listed above, you will be one step on your way to owning a successful and professionally run business with a foundation on knowledge and delivering value.