Rent skills swap: L lets to T who refurbishes property

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  • Rent skills swap: L lets to T who refurbishes property

    we all know what rent 2 own is but do you know what 'rent skills swap' is?

    with rent to own, you ultimately 'lose' the property through selling it and realising the equity but if you're anything like me, i like collecting and haven't sold a property for a long, long time - my strategy is long term.

    the concept of rent to own means you get to 'sell' a property to someone who is willing to spend money and fix it up with a view of buying.

    the concept of rent skills swap means you get to rent a property to someone who's willing to fix it up without a view of buying... why would someone go for this option?... because! is the short answer.

    common with both options is the fact that you get a long term tenant who will look after the property and more importantly take on a crappy property and put their love into it.

    here's how it works (based on a recent deal i've negotiated);

    the property doesn't have any central heating or boiler and hasn't been decorated for 20 years. the kitchen needs to be moved into the next room and totally updated. the bathroom needs changing too.

    my advert was aimed at potential tenants who had trade contacts. i requested tenant only on HB because warmfront will pay for a new boiler and rads (thanks P.G.). i didn't even mention the rent - just said 'reduced rent' avaialable on this property.

    the plan was to take a 5 week deposit in one hand then give it back to the tenant on the other as a contribution towards materials. also, i would charge the incomming tenant the same rent as a 2 bed property (this prop is a 3 bedder) for 12 months to help them with the cost of the refurb. they would save £150 per month.

    the plan worked and the new tenants are moving in 2 weeks! happy days!!
    Saf
    Music Teacher

  • #2
    Leaving you free to get some punctuation lessons! Everyone's a winner!

    mtg solutions inc
    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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    • #3
      It works

      I know a few folk who have done the rent-skills swap thing successfully both upnorf and downsuth. I'm just starting an advert in the next week for this on a property that needs a light refurb. fingers crossed.

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      • #4
        thanks for making me smile mtg. i always look forward to your replies!

        punctuation was never my strongest point but my personality compensates i feel.
        Saf
        Music Teacher

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        • #5
          Originally posted by saf View Post
          thanks for making me smile mtg. i always look forward to your replies!
          You are easily amused.
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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          • #6
            fancy a blind date? i promise to let you get the last word!
            Saf
            Music Teacher

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            • #7
              There is a posting on CAG (residential property) where tenant agreed to do up the property, on the basis that the initial 6 month AST would become a 5 yr tenancy. After 5 months and the tenant having done the job and spent a considerable amount of their own money, LL has now put property on the market - and refused to pay for any of the work that has been done!!

              http://www.consumeractiongroup.co.uk...s-4-000-a.html

              Anyone considering doing anything like this needs to have a watertight agreement (missing in above example!!) between the parties!!
              Mrs Jones
              I am not an expert - my posts are my opinion and should not be taken as fact!!

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              • #8
                that's bad isn't it! ... obviously a dodgy landlord.

                you're absolutely right though about having an mutually beneficial agreement in place - which i have.
                Saf
                Music Teacher

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                • #9
                  Originally posted by Mrs Jones View Post
                  Anyone considering doing anything like this needs to have a watertight agreement (missing in above example!!) between the parties!
                  Best if each has independent legal advice, to avoid later disputes. The same solicitor/firm should certainly not act for both [conflict of interest].
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

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                  • #10
                    Originally posted by saf View Post
                    here's how it works (based on a recent deal i've negotiated);

                    the property doesn't have any central heating or boiler and hasn't been decorated for 20 years. the kitchen needs to be moved into the next room and totally updated. the bathroom needs changing too.

                    my advert was aimed at potential tenants who had trade contacts. i requested tenant only on HB because warmfront will pay for a new boiler and rads (thanks P.G.). i didn't even mention the rent - just said 'reduced rent' avaialable on this property.

                    the plan was to take a 5 week deposit in one hand then give it back to the tenant on the other as a contribution towards materials. also, i would charge the incomming tenant the same rent as a 2 bed property (this prop is a 3 bedder) for 12 months to help them with the cost of the refurb. they would save £150 per month.

                    the plan worked and the new tenants are moving in 2 weeks! happy days!!
                    I'm a bit confused...several questions.

                    How does this get around LL's s.11 obligations to provide heating/hot water? I thought that was compulsory - maybe not if there's no boiler to repair and maintain?

                    How likely is it that a tenant on benefits would have trade contacts as well or be any good at advanced DIY like installing kitchens/bathrooms?

                    How do they save £150 per month if benefits are paying the rent? Surely they'd just get paid whatever the rent actually is.

                    Even if they are profiting by £150 per month for a year (£1800) wouldn't this all be spent on the improvements, so where's the benefit to T?

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                    • #11
                      Re hot water/heating, s.11 of LTA 1985:
                      a. does not oblige L to install anything, only to ensure the working of what's already there; and
                      b. could be disapplied by agreed County Court Order (i.e. with T's prior consent) [s.12].
                      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                      4. *- Contact info: click on my name (blue-highlight link).

                      Comment


                      • #12
                        Originally posted by jeffrey View Post
                        Re hot water/heating, s.11 of LTA 1985:
                        a. does not oblige L to install anything, only to ensure the working of what's already there; and
                        b. could be disapplied by agreed County Court Order (i.e. with T's prior consent) [s.12].
                        Thanks. Very helpful to know.

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