Rent To Rent: Where Do I Begin?

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Rent to rent (R2R) is a real entrepreneurial business venture. It is something that can satisfy both the tenant and the landlord. For the landlord, they can leave someone else to deal with the management of their rental properties while receiving guaranteed money every month. For the tenant, they have the opportunity to make some extra income, as they can sub-let the property and pocket the difference. Keeping that in mind, read on to discover more about the hottest rental strategy around.

First You Need A Property To Rent

To get involved with rent to rent, you need some start-up cash, and you need a property to rent. But, don’t fret, as the start-up cash you need is nothing like you would with other systems. While buying properties costs thousands and thousands of pounds and the more traditional cash flow strategies, including the likes of buy to let and buying HMOs, require a lot of cash, R2R requires a much lower investment – simply the rental cost and the cost of converting spare rooms into potential bedrooms. In most cases, you’re looking at costs of about $3-5k, which covers things like the deposit, new furniture, property management, insurance and a small amount of refurbishment. However, when you consider that the results could mean that you’ve negated that start-up cost within 3-4 months, it’s an amazing investment.

Before this, renting out a House in Multiple Occupation (HMO) that you’ve bought, which is a house split into bedsits and sees each tenant having their own tenancy agreement, was considered the way to go. But now, most who use this system to make a profit are turning to R2R. While you don’t own the property, you pay the landlord an agreed rent rate that guarantees them a payment – even better if you throw in a long-term contract with them. But you still need to find the right rent to rent property. If you, for example, take on a one-bedroom flat that also has a study – that’s no good. While you can convert the study into a bedroom, the profit margins are tiny. You’ll want properties with the potential to house multiple occupants, ideally five or six.

Understanding Why Landlords Like Rent 2 Rent

There are multiple reasons why landlords would consider working with someone in a rent to rent strategy. Firstly, the landowner may want to retain a home they wish to live in again but, due to work or family considerations, cannot currently live in. This leaves them with issues. If they operate as a landlord, they’re going to need to find tenants. Then they need to put in the time and the effort to deal with any issues that arise for their tenants. With the rights of tenants now at an all-time high, the days of the absentee landlord are over. If they’re away in another country, or some considerable distance away, they can’t easily perform landlord inspections either. So, in this scenario, they’re probably going to be considering going through another party in any case, and rent 2 rent is certainly appealing.

In other cases, the owner would rather just be rid of the maintenance and management of their properties. Perhaps they are getting close to retiring and feel they want to absolve responsibility. For this reason, they may think about taking on a smaller property in a more convenient location that sees them have less responsibility. However, this now means they have a large, vacant property on their hands that is costing money, and they have to go through the hassle of selling and buying. These are the exact situations where you can step in and make your move. These people are calling out for someone to manage their property and take the stresses away. You can do this, and you can make some serious money in the process.

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