Hi All - thank you for your advice on this, this is really helpful.
My case is a little different as I currently rent my house out to a tenant. He has been living there for 5 years, pays rent on time and is a proactive and positive tenant. I wish to exit the estate agency that I have been using to manage this tenancy and wish to move the tenancy to Open Rent as I have done this successfully with my other rental properties.
When talking to the tenant yesterday to let him know that we will move his tenancy to OpenRent, he let me know that he has set up a limited company to cover the niche professional services that he provides. He is an expat and asked me that when moving tenancy to Open Rent could I change the ‘tenant’ from him personally to the limited company (he is sole director) as this would benefit him from a tax perspective.
I have no issues with the credit worthiness of this tenant, and we have a good relationship, he is also a landlord himself in his home country however I was wondering about the pitfalls of this arrangement. I probably should have explained this more clearly at the outset.
Does anyone have any ideas of the negatives of this arrangement? there is a financial benefit for me if I move the tenancy to the limited company. If I exit the estate agency and maintain the same tenant, we still need to pay the agency 7% plus VAT for the duration of the tenancy, The tenant wishes to stay for 3 years (till his children complete their schooling) so that’s not an inconsiderable amount we will be paying to the agent for zero services. If we move the tenancy to the limited company, in effect the limited company is a new tenant so won’t need to pay the agency 7%
Thank you if you have got to the end, its a bit complicated! if you have any advice about this arrangement please could you let me know