Rent-to-Rent Compliance

You need to be making sure that you're setting yourself up as a business and you need to make sure that you've got the relevant paperwork , documents and , of course , compliances in your business . Now , I've done other episodes and videos on compliances , but I will run through these .

But there are also some fundamental elements that people oversee and do not set in stone when they're building a property business , and I want to help you with those a bit later on in this episode as well .

So , firstly , as a property entrepreneur , if you like , as a property business owner , you need to make sure that you are registered and a member of the ICO for data protection . It's about £40 for the year , so it's not going to break the banks .

But if you're holding anybody's personal data , you need to make sure that you are a member of this and you are storing and keeping people's personal data in a safe and secure and password protected manner . We do want to make sure that we get this right . Why ? Because it is other people's information .

So even if you're just dealing with estate agents , landlords , vendors any information that you have from them phone numbers and things like that if you do have it on a computer software or anything , you want to make sure that it's password protected .

But you want to make sure that you are a member of the ICO , as you are a registered business , a limited company , as they say . You also want to make sure that you are a member of a redress scheme , a property redress scheme . So the PRS is who I am actually registered with , and the PRS are there for any disputes .

So if I have a dispute with a landlord , with a vendor , with a tenant , basically if we cannot resolve that dispute ourselves , the PRS can step in and act as a medium to make sure that everybody is acting in the right way and also to try and help us resolve any of the differences that we have .

So again , make sure you're a member of the PRS , and that's a yearly membership That'll set you back around £100 , okay . The next thing which is really nice to have is to make sure that you join the NRLA , the National Residential Landlords Association , even if you're not going to be doing rent-to-rent deals , even if you're not going to be managing it yourself .

This is a great , great club membership , should I say , for landlords to join . That can help you in so many ways . They have a lot of AST agreements Section 21 , section 8 . They have all sorts of different licensed agreements as well .

They also offer you discounts as a landlord on products and services , and they can also give you legal advice if you're struggling with anything particular when it comes to tenants and tenancies , and maybe even your letting agent or anything like that . So it really is a good one to join . You will also need , for a rent-to-rent business , some insurances .

So you're going to need professional indemnity insurance to make sure that your business is covered , and you will also need public liability insurance as well . You don't have to break the bank on that .

It'll cost you around £35 , maybe £40 a month to have both , but make sure you have those just in case anybody has any accidents in your properties or in and around you when you are there , and also if anybody wants to sue your business , you at least have some indemnity insurance about that .

Now , if you are running a successful rent to rent business , maybe you're doing serviced accommodation , you want to be making sure that you're using licensed agreements , you're set up with the right channel managers and things and , of course , if you're HMOs and you're taking deposits HMO managers you need to be a member of the DPS , which is the deposit protection

scheme . So you want to make sure that you're storing anybody's deposits in a government protected scheme . There are a couple of them . I use the DPS doesn't cost you anything to do so and you've got within 28 days to make sure that those deposits are put in there . You'll get a notification saying that it's stored there . So will the tenant .

So everybody is happy . It's all above board and that's great Service accommodation . Obviously , what you would do for a deposit is potentially take a credit card payment , maybe a pound off of a credit card , and of course then if they do damage something , you can then charge their credit card for this .

What I would also say on that just to get rid of any confusion , because when you're taking a pound , it can be difficult sometimes to get that pound back , particularly if you're using companies like Stripe to take payments and things , where they take a chunk out of it anyway and you end up actually losing a little bit of money for it .

Just say it's one pound , non-refundable . Make it nice and clear . Nice and easy . It's done and dusted . Nobody's expecting to get that one pound back . You'd be surprised the amount of people that will come and knock in saying you still owe me a quid , unbelievable . So just make that non-refundable .

Fit it into all of your figures , into your 90 rates , into the costs and everything like that , if you have to . But non-refundable pound . I haven't had anybody complain about that . So what else do you want to be thinking about and looking at ? Well , you want to be running your rent-to-rent business , your property business , as a business .

So what I would say is if you're setting yourself up as a limited company which I always recommend you do for rent-to-rent in particular you want to make sure that you've got all of those compliances in place . And then you want to start making sure that you have a business bank account to be trading from .

I see a lot of people will set the business up and then they wait to set their bank accounts up because maybe they don't want to set it up just yet . That's a mistake . Try and set your business bank account up as soon as you open your business , because it can take a few weeks , potentially even months , to get a business bank account open .

They can be funny people in the financial institute . Sometimes they can open you a business bank account in two days . Sometimes it takes two weeks , who knows , who knows , I guess it's really just how busy they are , maybe somebody's on holiday or something like that . But make sure you open it as soon as possible .

But the other thing that I would really recommend that you do is to open up other accounts in the bank account that you have . So you've got your business bank account set up .

What I like to do is have other accounts open that lead off of my main account . So potentially my rents and everything that come in each and every month might go into that main account .

Ok , but then a percentage of those rents coming in that I get paid for my rent to rent business , I will have a small percentage going into another account which will be marked as maintenance . I will also have another account that will be marked as voids and I will have another account that is anything else OK .

And the reason I have those is because at times I will have to sort stuff out , I will have to pay for maintenance changes .

I will have to fix things , I will have voids , I will have times where I haven't got tenants in there all the time , and I like to have those separate pots Because when you're getting started and you see a lot of that money coming into your bank account , it's very easy to get carried away and start paying yourself some nice dividends or some monthly wages out

of there and you soon see that main pot go down . Something goes wrong and you cannot fix it because you haven't got that other account building up .

Now what I have enjoyed is the fact that , because we've been trading now for so long , is those pots are pretty much maintained to a full standard , which means that I like to try and keep 5,000 pounds in each of those pots . But right here , right now , they're building up to be even bigger pots . Now we can transfer that money over . That is our money .

We can use that money to invest , but we still have those pots to take it over in the background . So if anything happens and we have a major emergency and we need to spend that on anybody's properties to get things fixed quickly , we have the money there to be able to do so .

You don't need this right at the beginning , but just when you start making money , when you've got income coming through , have a pot for maintenance , have a pot for voids , have a pot for marketing , have a pot for education , if you like . I keep it simple when you begin , at least have one for maintenance and voids . But those are what I have now .

So I actually have my property business building a pot of money up for me , for my education , so that if I see some training or I want to be coached or I want to be mentored and I want to better myself whether it's in property , whether it's in business , whether it's being a father , a husband or just want to get fitter I have a pot of money in my

business that I can use to spend it . So I don't have to think , oh , I've got to put my hand in my own pocket and pay for that education . I actually have my business paying for me and you're allowed to do this . Why ? Because you're the director of your own business .

So it's in the business's interest for you to make sure that you are in top health , for you to make sure that you're learning more , for you to make sure that you're being the best director to make sure that your business survives and flourishes as well .

So do make sure that you build in little pots and you can have as little or as much money going into those sub pots as you like . Just don't expect that all of the money that's coming into your business account that you can have as a wage , because you will have systems .

If you're doing SA , you'll have systems , channel managers you know you're going to have different systems there . If you're using your properties and you're doing HMO , you're going to have a tenant management software , among other things . You've got your insurances that you've got to pay .

You've got your other legislations , your ICOs that we spoke about , your PRSs and things . So have a little pot for everything that's there so you can sleep well at night and if something goes wrong or maybe you have a void for longer , you can start taking that void money back out and your main balance is fine . I hope this helps you .

It's all about becoming savvy business people to a point . Whether you're just doing property as a hobby alongside your full-time job or whether you are going to go into property and do it 100% . Make sure that you set yourself up for success , that you set these little systems up there and it makes life very easy for you .

It's easy to track where the money is , it's easy to track where money's going in and out and , of course , as I say , you can sleep well at night , knowing safe and full well that your business is in great financial health .

It will come over time , it won't happen overnight , but set these things in stone as early as you possibly can to really help support you in your growth .

A caveat to that is , if you need any more help or any more assistance , do make sure that you check out the Property Unleashed podcast that has episodes coming out each week .

Obviously , we have the YouTube channel as well , and do check out thepropertyunleashedcom for free tools , resources , trainings , ebooks and , of course , I do offer some one-to-one coaching as well .

So if you're interested in taking your property investing to the next level and you need somebody to hold you accountable , to push you to the limits , to push you to the targets , to create the life that you desire , well , I can help you do that , and we have a lot of successful case studies to prove it as well .

So all that leaves me to say is get out there , smash it , build the property business that you desire to change your life and come and join me in the next episode now .