Property Investors Academy student Callum Prescott has built up a healthy passive income for himself from rent-to-rents while also holding down a full-time job. His serviced accommodation business clocks up a profit of around £3,000 per month – for a minimal amount of his spare time. He has also launched a bespoke deal sourcing service, charging investors a similar sum upfront to find them lucrative opportunities.
Selling deals gives Callum quick cash
Callum, who works in aviation assurance, got into property through the conventional route. He saved up a deposit to buy a rundown house with a friend for £360,000 just over a year ago. He then moved in while they did it up.
It was his first home, and he still lives in it now, but plans to sell up next year, having added value to it.
That initial project sparked his interest in taking up some training which led him to Samuel Leeds and the discovery of creative strategies to make money from real estate.
One of those methods was renting properties from landlords and then letting them out at a higher rate to make a profit.
Callum was sceptical about the rent-to-rent strategy, but after ‘cluing himself up’ on the subject realised it was not as risky as he had feared. He also learnt that he could sell property deals to investors to give him some quick cash.
Having made the decision to ‘go for it’, Callum took on a two-bed maisonette in central Bristol, agreeing to pay the owner a guaranteed rent of £1,300 a month.
“We got some rejections at first, but then we found this one,” recalls Callum. “It was already listed on Airbnb but the landlady didn’t want the hassle of managing it. We listed the property straight away in the condition it was in. It was overwhelming how easy it worked.”
He adds: “When you get the keys for the unit you’ve just committed to paying the rent for you do wonder if it is going to work. But we weighed up all the risks.
“We’re not tied into a long-term contract. We structured it. There are break clauses in there which protect her as well. We knew what the worst case was, if it didn’t get booked up, in terms of what we’d have to pay to activate the break clause [and pull out of the agreement].
“You could also just get a normal tenant back in which would pay the rent if you couldn’t get out, depending on what the contract was. So it wasn’t that risky at all.”
The agreement also includes taking care of any maintenance and repairs which need doing. In return, he is allowed to put in clients on short stay lets.
It is an arrangement which suits both parties. The landlady is ‘over the moon,’ and so is Callum as the margin on the property amounts to about £1,500 a month.
His latest rent-to-rent is a traditional four-storey building in the Clifton area of Bristol. Callum viewed it on Boxing Day, but it was taking longer than he had hoped to get the keys. So, he tracked down the landlord and contacted him through his companies.
“He had three registered companies on Companies House. So, I sent a letter to each one to his accountant. A week later he phoned me up and we just created our own contract. He still paid the estate agents their fee. So, now we’re in good communication with them and I’ve got a really good relationship with the landlord.”
With the target market being people who need accommodation temporarily while on the move, this rental property is generating just under £1,500 a month net.
It is currently being let for a month to a couple from the Philippines and he has just ‘locked in’ a five-month booking from a family looking to relocate to Bristol from Thailand.
Callum says he wants to experiment by getting away from just letting it for two to three nights at a time and focusing instead on obtaining longer stays.
He has also been packaging and selling rent-to-rent deals which have helped fund the rental side of his enterprise. So far, he has sold four staggered over a period of several months. Recently, however, he changed his approach.
A Property Investors coach warned him against sacrificing too much of his time on sourcing if his goal was to grow his serviced accommodation business. As a result, he now only offers a bespoke service, taking on two clients each month.
“Now I can do both and I know I’ve got a bit of time to play with. I’m also going to find the right deal for them,” explains Callum.
He also charges the customer in advance to avoid falling victim to ‘time-wasters’ after seeing one of his deals fall through because the investor was unsure about it.
“Even though I told them I’ve got one a couple of roads away and I’m making this much money they still weren’t confident. So, I take a payment upfront now and we work with the customer to find a deal that suits them.”
His average charge ranges from £2,500 to £3,000. The service also includes helping an investor to get a rental property up and running so that they can manage it if they want to.
‘Joining the academy was a great decision’
Callum sold his car so that he could afford to join the Property Investors Academy. It proved to be a wise move as he has already got his money back through sourcing deals. He tested the water first by attending another of Samuel Leeds’ courses before taking the plunge.
“It was a hard one, but I look back now and think what a great decision it was because it’s not just what you learn. It’s the people you meet. They’ve got the same drive as you and they want to achieve the same thing.
“If you’re having a bad day, you can just phone up someone and they’re probably having a really good day. They pick you back up and vice versa. You work as one big team.”
Another benefit has been the mentoring calls which have helped him to keep going. Being without a vehicle has not bothered him, he says.
“I still haven’t bought a new car yet. I share my missus’ one. Again, what’s the risk? Do I need a car? I work from home.”
Having a job that allows him to do that has enabled him to pursue his business in his spare time.
“In comparison to other people it is quite easy from my perspective. I only do 40 hours a week. It’s flexible working. I can finish a job and then go straight on to property. There’s no commuting. It’s not a traditional nine to five.”
He spends about five hours a week, or an hour a day, on managing his rent-to-rents. It is not a lot, he admits, but it still leaves him with a busy schedule.
“Trying to get to the gym and spend time with family, it’s tough to do all of it, but you make it work. That’s the beauty of it once you systemise the rent to rents.”
Callum recognises he has been lucky to have the support of his girlfriend and parents who have pushed him on and have been delighted to see him do so well so quickly. He is aware, however, that people can struggle if they lack encouragement when going into property.
“My family have never questioned it. It was my decision. They would have known I thought it through. It was the right call to make and even if it wasn’t I would have got a positive out of it in some way.”
Next on his schedule is a joint venture with the landlord of the Clifton rent-to-rent who has just bought a rundown property at auction in the centre of Bristol.
Callum will be renovating it with a builder he met on the academy and turning it into three studio flats which the landlord will offer to them at a discounted rate. Callum will then split the flats with the builder who will also get paid to do the work.
Flips and buy, refurbish, refinance projects are also in Callum’s plans.
“With the money I’m earning, and just saving from rent-to-rents, my partner and I are going to get a property worth around £100,000 either up north or somewhere like Swansea and build that side of it as well.”
The life of an entrepreneur is not trouble-free. On his way to share his story with Samuel for his YouTube Winners on a Wednesday series, for example, Callum had to deal with a leaking shower at an apartment he controls. But he has built a team around him who he can call on to check out any problems which arise. There is also invariably someone in his network who will have experienced a similar issue and can offer advice.
It was in lockdown, says Callum,when he was mainly working from home with little interaction with others that he experienced a loss of fulfilment from his job. Business gave him a different route to go down. He was already familiar with that world as his parents had both started their own company and saw it could be good for him too.
“When we got that first property and did all the renovation ourselves, I was loving it. I thought this was something I could go forward with, and it went from there.
“The satisfaction of then seeing I could massively scale up off just from one, five-month booking, which funds three or four rent-to-rents, made me say to myself, yes this is the reason I’m doing it.”
- Calculate the risk and then just go for it if it is feasible. It might be hard for a year or so but after that you can quit that job or release more time to scale up.
- Instead of saying you can’t do something, think how you can do it. Work to your strengths to find a solution.
“Even if you join a course or the Property Investors Academy no one’s ever going to do the work for you. You’re going to get training, mentoring and opportunities but ultimately you need to be prepared to put the time in which Callum has done. He’s been committed and it’s worked.
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