Property Forum Staff
I'm interested to hear from anyone who has actually tried a rent-to-rent investment and how they found it? Is it quite difficult to actually find this type of deal?
Make sure you keep it under 4 rooms - this way you won't need the license!!!It's harder than some strategies but not as hard as you might think... Basically you are looking for a larger house you can rent (easy just look on the Lettings pages on Rightmove for your chosen area) and then you need to approach the landlord with your proposal. This is something along the lines of:
- you'll be a good long term tenant, maybe offering a much longer lease than 12 months
- you fully manage it for them
- you'll keep the property in good condition
- you'll always pay on time and maybe several months in advance (if that helps your negotiation).
In return they might give you a favourable rent AND the ability to sub let the rooms separately.
Remember you'll have to deal with any HMO regulations and ensure the landlord's mortgage allows for HMO's...
It's not the property you'll be looking for, rather the motivated landlord who wants a long term, low maintenance tenant. A landlord who will be more flexible and grant you the terms you need to make it worthwhile...
Start by looking at the "for let" listings and see if any properties look suitable...
This is very true - so many landlords we have found are willing to pass there property across to us as it gives them the income but completely hassle free!! Complete win for the landlord!I think you would be surprised to learn how many landlords would like to hand over subletting of a large building to a third party. If they are guaranteed the rent they require on a monthly basis, and everything is legal and above board, this could be a win-win for all parties. Why not approach landlords of larger buildings where they are advertising rooms to let?
Depends if you want the expense of getting the license - anything above 4 rooms you need the license! Serviced accommodation is a good shout also!!As with any investment it all come down to how much margin there is in the property. I would assume the larger the house the greater the potential margin but then again new HMO regs might impact returns.
When you're doing R2R, you're essentially being the agent (in most cases, you sign a management contract with the landlord and not a lease),and selling yourself to the landlord in a very similar way. The advantage for landlords from you over most other agents though is that you're offering guaranteed rent over a long time period, and you may be offering a slightly higher rent that their normal net rent, after costs.Quick question - why would a landlord not simply put their property in the hands of a property management agent?