How to Persuade Landlords On Rent-To-Rent Agreements
In this article, I’ll be talking about rent to rent and why right now, it’s a brilliant opportunity to control properties and get cash flow.
I’ll show you how to approach landlords and what to say to them as this is usually the kind of stuff that I’ll save for my property investors crash course but will be giving to you on this article for free.
Rent to rent is when you control a property and instead of owning the property, you pay the landlord a monthly rent as a management agreement and rent it out to other people while making a profit in the process.
Most rent to rent properties make between 500 and 1000 pounds’ profits per month off each property and that's more profit off of the rent to rent houses than most landlords make when they own the house.
However, why would you save up and buy a house and rent it out by making a couple of few hundred pounds a month as you're also hit with all the tax problems of section 24?
Well, you've got to pay stamp duty tax and the two reasons as to why people don't like doing rent to rent is number one, because they can't get their insurance and don’t know how to persuade the landlord.
The second reason people don't like to do rent to rents is because they think that serviced accommodation is dead right now since we've been in lockdown and it's risky.
If I can't rent my properties out, I’ll say number one that if you don't get tourists in your properties, advertise them to business professionals and number two, have a three-month break clause in the property with the agreement so that if after three months it's not working, you can walk away.
Make sure that the break clause is drawn up properly and doesn't let him walk away without reimbursing you with your time and troubles.
Landlords have never been so desperate to pass you properties on rent to rent contracts and right now, you might think that you've tried and failed however, that’s because you're saying the wrong thing.
When you learn to say the right thing, it works because what you should be saying in order to do business with someone is to firstly solve their problem because if you go to a landlord and say you've got a problem as you need to rent their property, they’re going to say they’re actually good.
Rents have gone up by 7.5% this year because tenants are coming up and so what you need to do is to remind them about the tenant eviction ban as you could say, how much are you looking to get for your studio flat property? They might say something like they are looking forward to renting it out for 550 pounds and so, what you are going to be left with once you’ve paid for the management fees and maintenance costs you’ll ask them, how about I pay you 400 pounds a month guaranteed rent for three years?
Therefore, you need to remind them of the problem these tenants come with and so, if they've got a tenant that just goes, I’m not going to pay rent, they might have a property for a year where they cannot get the tenant out which is a bit of a problem as a landlord.
You’ll agree to pay a monthly guaranteed rent and if you don't pay, they can terminate the contract and therefore, they don’t have to worry about tenants.
In fact, there's a queue of landlords that I’m actually going to be approaching over the next couple of days and that's how you get rent to rent deals as it’s easy and all about what to say to the landlord.
People accuse me, Samuel makes it look too easy which is a compliment and the same way Cristiano Ronaldo makes football look easier, that's how I make property look easy.
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