In a recent video for my YouTube channel, I share with you the 4 steps to getting your first Rent to Rent deal, specialising in HMOs. If you aren't familiar with Rent to Rents, please watch this video first! Rent to Rents are such a great way to build your portfolio without owning it. Rent to Rents have many benefits but the main ones are: gaining experience in property; good cashflow; getting your foot in the door; and leaving your job without owning a property!
In the video (above) I give you the exact steps you need to take to get your first Rent to Rent deal. Please share the video on your social media pages to help educate the masses about financial freedom. If you prefer to read rather than watch a video, this article will give you a summary of the 4 steps you need to take.
1. Make a game plan
You need to decide what kind of Rent to Rent business you want to run. If you are good at interior design, you may want to do Rent to Serviced Accommodation. If you currently live in an HMO, you might want to try renting out a whole house and renting out each room yourself (with a Rent to HMO deal).
You will also need to form a company. This can be done online for a few pounds. This helps to limit your personal liability for the debts of the business.
2. Be sold on the service of Rent to Rent
Before you go out and sell the idea of Rent to Rent to a landlord, you need to be sold on the idea yourself. You need to know why a landlord would agree to it in the first place. For the landlord, Rent to Rent is a great deal. The landlord gets a guaranteed rent each month with no void periods; he doesn’t need to handle tenants; and you will deal with any issues that arise for him.
Rent to Rent means the landlord can have truly passive income from property, while you take on the work. Understand this before speaking to landlords.
3. Present the opportunity to landlords and letting agents
You will need to speak to a lot of landlords and letting agents. Don’t be put off by getting told ‘no’ by a lot of people. Just set a number of calls you are going to make each day and make those calls regardless of the outcome.
On the phone, simply tell them you are looking for a corporate let and that you won’t be living in the property yourself. You can explain your business model in person if they are open to an appointment.
4. Putting forward your offer
The final step is putting in an offer. You need to calculate this based on all your costs which will include utility bills, cleaners, etc. You should be making a minimum of £500 profit each month; this gives you a buffer if anything goes wrong. You should also break even within 6 months in terms of the expenses of acquiring the deal. This will include the deposit and the cost of any light refurbishment you will do to the property.
If you can’t get what you need, move on. Having no deal is better than having a bad deal.