## The documents to request
Ask for the head lease or management agreement, landlord consent, company details, redress or registration evidence where relevant, AML process, insurance assumptions, licence status, floor plan, room rent evidence, and a schedule of ongoing responsibilities. If the arrangement involves an HMO, start with the official [HMO licence guidance](https://www.gov.uk/house-in-multiple-occupation-licence).
For estate agency or deal sourcing activity, HMRC's [estate agency business registration guidance](https://www.gov.uk/guidance/money-laundering-regulations-estate-agency-business-registration) is a useful official reference. It does not answer every rent-to-rent question, but it reminds investors that introductions and property deals can carry compliance duties.
## Model the deal as a business, not a rent spread
The weak version of rent-to-rent underwriting is simple: expected room rent minus guaranteed rent equals profit. The better version includes:
- Voids and bad debt.
- Utilities, council tax, broadband, cleaning, maintenance, and management.
- Licence fees and compliance works.
- Furniture, replacement, and deposit handling.
- Legal review and contract setup.
- Exit costs if the arrangement ends early.
Use the [gross and net yield calculator](/tools/gross-net-yield-calculator) to sanity-check the operating margin. Even if you are not buying the property, the same net-income discipline applies.
## Worked example
Suppose a sourcer offers a five-room rent-to-rent with 3,250 per month gross room rent and 2,000 guaranteed rent to the owner. The apparent spread is 1,250. If utilities, council tax, cleaning, maintenance, broadband, management, and void allowance total 850, the real monthly margin is 400 before setup costs and risk.
If the sourcing fee is 4,000, the first ten months of margin may only recover the fee. That is not automatically bad, but it is not the same as a high-yield passive deal.
## Red flags
Be wary of no written landlord consent, unclear licence responsibility, no comparable rent evidence, no contract review, guaranteed returns language, and sourcers who cannot explain downside scenarios. A good sourcer can show why the deal still works when one room is empty, energy costs rise, or the council asks for compliance evidence.
## What to save in the model
For this rent-to-rent sourcers: vetting checklist check, save the source links, date checked, calculator inputs, base case, downside case, professional question, and final pass or proceed decision in the deal notes. Also save who verified each assumption: broker, solicitor, council, insurer, accountant, or your own viewing notes. The article should not be the evidence itself. It is the checklist that tells you which evidence to collect, where to link it, and which calculator result changed the decision. For live deals, rerun the model whenever one assumption changes. If the answer changes, update the offer price before sharing the pack. Keep rejected assumptions visible too.