How to handle the R2R (rent to rent) business model

In this example, a company R2R Ltd is renting a property from Gary Plein an owner, and subletting out the rooms (units) whilst paying the owner a fixed amount per month on the property.

The R2R landlord is a cost of the business and so the owner app is not to be used

The process is as follows

1. Ownership

When creating the property ensure you apply Gary Plein as the owner of the property ONLY, do not add him as the owner of the rooms

**The owner app is not to be used for R2R owners

 

2. Create an analysis code for this type of rent

This is money being paid out so its effectively negative rent. We have  created an analysis code for this type of rent called R2R Rent. This rent will behave as a negative charge (credit) applied to the owner statement as money owed to the owner.

Created analysis code by going to financials>analysis code>create * Please note your analysis code must be mapped to Xero or Quickbooks

2. Create a recurring charge at property level

Once created go to the tenancy>recurrring and add

View created recurring

 

3. View property owner statement

 

4. Creating the tenancy

 

When creating the tenancy the chosen rent is “Direct Rent” as the transaction type, meaning the rent is the demise of the R2R company an not the owner of the property owner Gary Plein

This article is linked to setting your default rent code and adding a tenancy

 

 

 

 

 

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