Starting in Rent to Rent
Interested in this strategy?? Do grab Jacquie Edwards Books on Rent to Rent!
"Do not wait; the time will never be just right. Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along. Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible." Francis of Assisi
I started out in property with no money (also no time! ha!) ... my first strategy was to create cash flow so I began with a rent to rent portfolio. This strategy is simply looking for properties on the market that are currently being marketed as single lets but have potential to be made into HMOs by renting out each room individually.
You pay the landlord a guaranteed rent for a set amount of time and you manage the property and any problems that arise. You then, are effectively the managing agent for that property, taking over furnishing the property, tenant finding and tenant management of the property. Do all of this to an extremely high standard and its a great strategy as everyone is happy. You, as a new investor, learn about staging properties and all the legalities of letting a property (perfect for your future dealings with letting agents!) and you make a healthy cashflow…. anywhere between £500-£1k pcm. In my experience it is a quick way to get started, but not a stress free one as the learning curve is steep (see also my post on HMO investing) … not only do you deal with legalities and being out of your comfort zone, it also takes, in my opinion, about 3 months for tenants to settle in properly (in this time there can be bickering amongst tenants and incessant requests for extras, plus many things seem to get broken! Then it takes about 9-12months for things like cashflow to settle into a recognisable state. For this reason I recommend keeping aside 1 rooms rent from as soon as possible to cover voids and build that up to a cash reserve of the full rent you will be paying to the landlord.
For me - I decided to start in rent to rent in November and by January I had my first two properties cashflowing and one more in the set up process! By February I was earning more than I had ever done! So, here are some simple tips to get you started :
You need to be prepared to view a lot of properties! Get your comfy shoes on and realise you will learn what you need to say to landlords over time… you dont need to get it right straight away. But, you do need to start to get it right.,
Learn your legals!! Become an NLA registered landlord
Go out and view rooms in the area you’d like to do rent to rent in… book viewings (at least 5) from spareroom and get to know your market this for me was the single most uncomfortable step but one that cant be missed!
Look on open rent and gumtree for properties that would be suitable to rent. Go and view as many as possible.
Don’t bother negotiating the rent… but work out how you can make this win win for both you and the landlord
Stage your property well!
Make sure you know how you will be dealing with cleaning and maintenance - task rabbit was my friend!
Advertise and advertise well - do your listing for your market! I went for a high end HMO market so I made my listing look like a serviced accommodation ad… in fact my rent to rent HMOs were almost a hybrid between serviced accommodation and HMO.
Have the most personable person you know do the viewings … I am a HUGE people person so I did my own viewings
Have systems!!!
Make sure the rent for each landlord comes out on the same day near the end of the month and your tenant rents come in at the same day at the start of the mont
WATCH your cashflow!!
I hope those tips were helpful! What’s your strategy? Do you want to get started out with a rent to rent portfolio? I’d love to know or help you out! Drop me a comment below…
Ana ♡
Want to connect? Find me on insta @dranaattlee, or why not pop along to a meet up? If you think I can accelerate your journey to your goals get in touch or book a coaching session!