The rent-to-serviced accommodation model is proving to be highly productive for Amy Hughes. The qualified accountant is making a profit of £4,000 a month from three furnished properties, two of which are in Milton Keynes. It is double what she used to earn in her previous job which she gave up in November shortly after completing advanced training with Samuel Leeds and his team of coaches. Not only that, Amy spends just an hour a day managing her portfolio.
‘I got bored with accountancy’
Amy was an accountant for 10 years. It was her first job after she left school. She started out as a purchase ledger clerk before eventually qualifying as an account in settlements.
Her future looked bright, but she was always looking for a way out of her job.
“It’s not something that excites me. I enjoy meeting people and building relationships. Of course, in accountancy you’re stuck behind a desk,” explains Amy.
She was also frustrated by the time it took to progress in her chosen career. It was a feeling that intensified after studying for two and half years to become a certified accountant.
“I was just bored. I didn’t know what to do with myself when I wasn’t studying. So, I found property.”
A friend sent her two of Samuel Leeds’ books and then told her to enrol on his £1 Property Investors Crash Course in August last year. She took his advice and followed it up by signing up for further training.
From having been demotivated, Amy found herself instantly drawn in by the energy and positivity at the first live event she attended.
“You leave the course and you’re just thinking I can do this. This is something I want to do. Not only that, the people you meet at the course and the network you can build up is great.”
Amy attended the Deal Finding Extravaganza and HMO Bootcamp and booked herself on two courses to learn how to operate a rent-to-serviced accommodation unit. It cost her thousands of pounds to get trained, but to her it was worth every penny.
“When I paid for those courses, I was still employed. So, it was just money that probably would have been going on holidays. I’ve always been interested in property from a young age. I just hadn’t had the training or the knowledge to be able to push that forward.”
Full of confidence after finishing her training that she could make a go of it, she set about finding her first deal, trawling sites like Gumtree and OpenRent for an opportunity. On her sixth email, a property manager responded with an invitation to view a one-bedroom and two-bedroom apartment in a newly built block of flats in Milton Keynes.
The manager had heard of the rent-to-rent strategy and was open to Amy taking control of the accommodation by paying the landlord a fixed rent and then letting it out at a higher rate.
With no experience under her belt, she decided to take on just the one-bedroom apartment, negotiating the rent down from £995 to £945 a month. She then got the property manager to sign an agreement provided on the training. There was also a deposit of £945 to pay, on top of the rent.
The fledgling entrepreneur had been taught how to assess the money-making potential of a property. For serviced accommodation, she looked for built-up areas where people would be travelling for work or relocating. A position near a train station was also desirable.
“I know they do work out of town as well, but for me and my first one, I wanted it to be pretty central.”
She also researched Airbnb, OpenRent and other platforms to see how much furnished accommodation in the area was being rented out for and what the bookings were like.
The final decision as to whether to proceed with a deal comes down to the figures, says Amy. Students on the serviced accommodation programme are given a pack containing a due diligence formula to help them calculate the potential monthly margins.
She produces a spreadsheet, setting out the guaranteed rent figure payable to the landlord and then deducts the estimated expenditure. This includes bills and booking fees, and an allowance of £100 for maintenance.
“Then I work out what occupancy rate I would need to get a profit of £500. If it was coming out at 100 per cent, for me at that time it wasn’t a good deal because with my first one I didn’t even know if I could do it at that point.
“Both of my Milton Keynes deals were 72 per cent occupancy for a £500 profit which equates to 21 days a month. So, it gives you a leeway of 10 days unbooked.”
Having satisfied herself that the one-bedroom flat could make money, she then went ahead, spending about £2,000 on furnishing it.
“When I got the keys I did feel nervous,” she admits. “But I think the adrenaline took over.”
She agreed a rent-free period of a fortnight which allowed her to buy the furniture and kit out the place.
She agrees with her mentor Samuel that when you throw yourself into a project, then you can’t be afraid because you’re too busy doing it.
“It’s exactly what I’ve done the whole journey. I’ve just been all in. All or nothing. No risk no reward.”
Amy manages the bookings herself, advertising them on various sites and making sure the calendars are synchronised to avoid any double bookings. She describes herself as highly organised from having worked in accountancy.
“I’m used to calendar planning, but with regards to synchronising the calendars it did tell you how to do it on the course. Everything’s on the course.”
She adds: “I’ve thought that when I get my fifth unit that’s when I’m going to get a channel manager. But even when you’re going to pass it over to a channel manager you need to know what you want them to do, and to what standard. If you did it at the beginning what would happen if the channel manager went bust and you had to fill in for a couple of weeks? You wouldn’t know what to do.”
It took her three days to get her first booking. “Those three days, I’m not going to lie, I was like, oh my goodness is anyone going to book this? Every single day I was refreshing the page on the booking platforms.”
When the booking came in, it was for six nights at a rate of £97 per night.
“I didn’t even have professional photos which is a must for me now. I was just trying to get it started and get it live. I’ve increased my prices now. The professional photos allowed me to increase my nightly price by £10-£20 per night.”
The next booking was for four nights, followed by a six-week booking from someone relocating to the area.
“It was 100 per cent occupancy the second month that it was live, if not the very first month because the first month was only half the month. I still have that property now. On average it makes £1,000 a month profit.”
Persistence pays off with second deal
Amy gave up her job in November to go full time into property after securing her first serviced accommodation unit. From her training, she also realised she could rent out her spare room. With the income from that and the flat, she was just a few hundred pounds short of her previous salary.
An added benefit was that she could claim bedroom relief tax. This meant she paid no tax on the first £7,500 of her annual earnings.
Her second deal came about through sheer persistence. Amy met a landlord when she was starting out who was sceptical about serviced accommodation. Undeterred, she kept in contact with him, dropping him a note every month that she still wanted his property. After five months he invited her to view it and she took that one on too.
“If you build a relationship with a landlord, they’re more inclined to trust you. If you keep reminding them that you’re there, still eager to get the property, they’ll just remember you.”
She now has a third serviced accommodation unit in Wellingborough. The yield on a two-bedroom property she manages is £2,500. The remaining £500 of her £4,000 monthly income comes from a profit split arrangement. The landlord pays the bills and mortgage, receiving a 50 per cent share of the profits, while Amy and the person who brought her in on the deal take 25 per cent each.
With no guaranteed rent to pay, Amy says there is no risk for her, other than investing her time into preparing the listings and marketing it. She also does all the cleaning of her properties as she is keen to understand every aspect of running serviced accommodation.
“A cleaner’s not going to tell you it takes three and a half to four hours if it takes you one and a half. You know. Of course, it varies depending how messy a guest leaves it but for the most part you know how long it takes.”
Another lesson for her is to never get too comfortable. When she had just the one apartment, her two guests ended up staying for five months. In Amy’s words, she was ‘living,’ with the £1,000 a month from the rent on that and her room. She was also getting some paid work from helping a couple of people with their portfolio.
Then her guests rang her out of the blue in May this year to say they had moved out. At the time she was driving over to her second unit to set it up with the furniture she had bought.
“That was in the middle of May. I had zeroed everything to get this second unit, but I thought it works. This is a proven model and I’ve done it.”
Amy says her family were worried about her taking on a rent-to-rent, believing it to be too risky.
“When I took on my second unit, my mum said to me, ‘Oh, you’re not going to get any more now are you?’ I said, of course I am.”
Although being an accountant helped her as she knew how to set up a company and was familiar with business procedures, Amy says anyone can succeed if they put their mind to it.
Her future plan is to take on whole floors in an apartment block until she has 40 units. Then she will systemise her business before moving into other strategies like property developing.
“I enjoy nice holidays, food and drink. So, I want to live a really good life. Also, I want to upgrade my car. That’s the motivation for me. I just want to build a life for myself to be able to do that and then even take my family on holidays.
“A goal is to hire a yacht with staff on and take my family and friends round the world. It’s something I will definitely do.”
- Get the knowledge and once you’ve got that just do it.
- The headspace is something I’ve really noticed since leaving the job because it’s free for new ideas to do business progression plans.
Samuel Leeds’ verdict
“A lot of people are a bit sceptical when they see my YouTube videos about rent–to–rent, but actually it is a very good business model. It’s a win-win for everyone involved and it’s a quick way of making money in property. Amy was able to build a small portfolio and get out of her job within a matter of months. She’s done amazingly well.”
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