Dangers of rent-to-rent

Dangers of unregulated rent-to-rent sector once again highlighted by case of property in Oxford. #RentToRent #Lettings #HMOhttps://t.co/ztwQ235xHX

— The Negotiator (@TheNeg) May 4, 2021

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The rise of suburbia's 'pop up' brothels

How ‘pop-up’ brothels transformed Britain’s suburban sex industry https://t.co/VJEy9AVa3u

— Guardian news (@guardiannews) November 25, 2017

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Don't become the victim of a sublet scam

Don't become the victim of a sublet scam! Find out more about the warning signs & your options here - https://t.co/8YERDSOBSJ pic.twitter.com/pSprjdXra1

— mydeposits (@mydeposits) November 3, 2017

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Fine for unlicensed 'rent to rent' property

Massive fine for unlicensed ‘rent to rent’ property in #Leytonstone https://t.co/4OrBpaEEAo @NaveenAgnihotr1 @wfcouncil pic.twitter.com/qZGbCX67u9

— LondonPropLicensing (@lplicensing) October 5, 2017

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Wembley 'rent to rent' landlord prosecuted

Wembley ‘rent to rent’ landlords prosecuted for running an unlicensed HMO https://t.co/VV3lNwSmvY pic.twitter.com/MYjgCnFqJo

— LondonPropLicensing (@lplicensing) September 14, 2016

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Legal eagle berates 'rent to rent'

Rent to Rent like printing money?

We have spoke before about the idiocy of the practice known as 'rent to rent' . Proponents of 'rent to rent' somehow believe it offers endless possibilities for the entrepreneurial to exploit inefficiencies in the rental market, whilst conveniently ignoring the legalities of the whole process!

Property Hawk is not alone in dismissing the whole exercise as a illegal sham. 

One legal expert in this recent article refers to supporters as a confederancy of dunces. 

HERE HERE! This is a well versed argument in a lot more depth and legal detail than I could ever muster into why the whole process doesn't and shouldn't work.

For genuine investors who want to get into renting property,  you need to save up for a deposit and buy a property and then rent it out legally. 

That's how you make money, not using get rich quick schemes invented and promoted by Property Gurus and Svengalis.

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Rent to rent exposed in new TV series

Channel 5 and Landlord Action expose sub-letting scam « New TV series launches 24th June http://t.co/mNrwsHSOAr

— Landlord Action (@LandlordAction) June 22, 2015

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Judge calls for photo proof to stop 'rent to rent' frauds

A judge has called for the landlords to provide photographic proof of ownership when renting out property to help prevent the increasingly common fraudulent scam of 'rent to rent'.

More London landlords have been caught out by a 'rent to rent' scam.

Landlords,  Alasdair and Joanna Reid, lost thousands of pounds when their supposed tenant sub-let their London flat while they were away on a career break in Africa.

The landlords believed they'd rented out their flat in Streatham Hill for £1,600 per month to a 48-year-old veterinary physiotherapist called Heidi Korn.

It later transpired that Korn had then tried to sublet the flat on to another couple at an inflated rent of £1800.

The 'rent to rent' fraudster was  caught by chance, when a contract with a forged signature got redirected to the Reids over in Africa.

Korn, from Ontario, Canada, was given an eight month prison sentence for fraud by the Inner London Crown Court.

Joanna Reid,commented:

“We are pleased with weight of the sentence. It was a very hurtful crime as it felt very personal."

However despite the sentence the unfortunate landlords are still owed £8,000 in unpaid rent.

Judge William Wood called for new measures - such as photographic proof of ownership to help prevent this “increasingly prevalent fraud.”

“It is worth proposing that when a private landlord seeks references from a prospective tenant he or she should provide proof of ownership and photographic proof of identity."


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Rent to rent guru disappears

We've covered the 'rent to rent' fad before on Property Hawk.

We said at the time we thought it was wrong and probably illegal.

Funnily enough, the so called 'rent to rent' guru Daniel Burton who claimed he was making £35,000 disappeared in October with his company Unida Place owing thousands to landlords and tenants who had rented through him.  Burton also charged hundreds of pounds to tell gullible individuals how they could make a fortune.  For more details see this piece in the Guardian.

Apparently Burton has turned up in Cleethorpes where he has set up his second letting agency since being exposed. Does anybody know what it trades under? It might be useful for others to know.

We have warned investors before about following so called property gurus.  If they have such a great scheme 'why? oh why?' being a businessman would you tell others how to do it?  Would Starbucks run a seminar telling the world how to run a successful coffee shop?

Property Hawk Advice
When it comes to investing in property it's always keep it simple.  You could have a look at our 3 Pillars of Buy-to-let for general advice on investing in residential property.  The other thing now is that when looking at borrowing money seriously consider a repayment not just an interest only mortgage.  Overall, in 20 years time you will have an income generating asset that you can sell or take an income from pretty much paid for by your tenants.  It's not 'rocket science' but also it's no fast bucks either.  This is the reality of being a landlord and of buy-to-let.

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Another property fable - rent to rent

This years property fable has had it's usual sad ending.

'Rent to rent', remember that one, it was the one before 'rent to buy'

Well, we were never very keen on this 'rent to rent' scam that some - landlords ( can we call them that or are they tenants of landlords who sub-let? ), anyway here's the latest story from the 'sector'.

It turns out that one of the 'rent to rent gurus', a Daniel Burton has gone bust. The young (know it all - clever clogs ) who'd put himself up as the sector's poster boy, giving out the typical cheesy "you can make a fortune just like me" webinars and courses, where wannabe investors could learn all his tricks for a few hundred pounds. You know the scene, a few biscuits, punch the air whilst shouting "we can do it!" and not spilling your tea, some powerpoint graphs and folder with a ten point plan. Well, he has closed his London company having gone bust.

According to Channel 4 the 'rent to rent' tycoon, who once boasted of £35,000 a month profit has gone back to Scunthorpe with his tail between his legs owing a load of money.

He has promised to pay back the £60,000 he admits to still owing. He described how he had been forced to sell his car.

Now the question is, having once been making £35,000 a month in profit, how can things go so quickly wrong? It wouldn't be that this property guru's claims were exaggerated, unrealistic - or even untruthful?

I mean, surely a property guru promising to show you how to make a fortune if you attend their £400 a day property seminar wouldn't have lied - would they?

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'Rent to rent' tenant fined

'Rent to rent' is the latest get rich scheme put forward by the 'get rich property pundits'.  I've commented before that 'rent to rent' is not only immoral from a landlords point of view it is almost certainly illegal.

Just to back up my sentiments a recent case in London involving a 32 year old tenant Vivek Strivastava establishes this.  He was recently prosecuted by Camden Council for renting out his Council property to students and was found guilty of two charges under the Fraud Act.  He was fined £10,000 and ordered to pay £6,000 to cover the Councils legal costs.

I hope that this case sends out a clear message to any tenant who thinks it's OK to rip off their landlord by illegally sub-letting their rental property.  'Rent to rent' is simply wrong.  Right!
  
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