“Rent to Rent” always struck me as a funny title to call any property strategy. What does it even mean?
Are we about to discuss how to rent a house just so that I can rent it out again because that seems a bit pointless doesn’t it? If the landlord wants to rent it to me to rent out again then it’s probably all just a bit of a waste of time.
But like all great ideas, the simplicity of the Rent to Rent model makes total sense once you see the full picture.
There’s a world out there, which you may find hard to comprehend, in which tenants do not pay on time and they even mess up properties. It’s a double whammy for landlords – limited income and a depreciating asset. How can landlords come back from the brink on this witout having to sell the lovely property that they thought was going to be their pension top-up machine?
Rent to Rent may be the perfect answer for them.
If you decide to follow the Rent to Rent strategy, you’ll be signing up to a deal in which you pay the landlord his or her rent and maintain the property for them. This sounds like a pretty poor deal until you realise that the twist in this strategy is that you offer the property out to tenants on a room by room basis. Instead being paid by one family or one couple, you’re now being paid by 4 or even 5 individuals who share the house.
This simple strategy gives you the strong cash flow you need to make the work worthwhile. By offering high quality rooms and inclusive bills and using robust tenant vetting techiques you should also find that the hassle factor is pretty minimal too.
The property owner also wins with this arrangement; their property is suddenly clean, tidy and maintained thereby protecting the value AND they get paid for doing absolutely nothing.
So, YES, rent to renting does work when (as always) you do it right.