In this two-minute read, we look at why you should be cautious of rent-to-rent schemes and how they could be less profitable in the long run.
Less rental income
While you might be tempted to enter one of these contracts, often, the way the business offering you the R2R option can be profitable is to offer you less than the typical market rate.
By offering you a lower rate for a fixed term, the R2R business model will only work if the person managing your property charges tenants a higher rate. Therefore, you could be earning significantly less than if you were to rent through a regular letting agent.
The unknown agent
Once you sign up, youโre basically losing control of your rental property for a fixed term. How many tenants will be living in your property? Who will ensure that all the correct procedures are followed? What happens if significant repairs are required? Whatโs the tenant turnover like?
While a lot of these details can be included in a rent-to-rent contract, as a landlord, you may be putting your reputation at risk by offering up your rental to a third party.
Fast cash
The attraction of the guaranteed rental model is quick profit and few overheads. Little to no experience is required before setting up this type of business. This means your rental investment may be put at risk by agreeing to work with people who have little, or no cash at stake. Can you really afford to hand over your hard-earned investment to someone with no proven track record?
Using a local agent
When you use a reputable local agent, they are regulated and experienced in letting out properties and often have a strong team behind them. They know what certifications are required, what makes a good tenant, and have access to tenancy deposit schemes and such like. So, you can feel confident in the knowledge that your property and tenants are looked after.
At Knightsbridge Professional Lettings, our lettings team has been working in the local community for many years.
We can achieve market rate rents and we keep our fees as competitive as possible. Call us on 0116 2745544 for more information.
