Main Issues to Consider in Rent to Rent

Rent to rent is a property investment strategy which allows property investors who do not have the capital to outright buy a property, rent from a landlord with the purpose of multi letting to tenants. Rent to rent is an effective way of generating income whilst investing less.

follow link Making Sure You Are Covered

Rent to rent does however come with potential issues which must be considered before investing in order to avoid making any potentially costly mistakes. If you are planning on sub letting, it is imperative that the Landlord understands your intentions with the property. The reason for this being, they may not be covered for that particular type of venture.

chf forex broker HMO Licensing

In some areas of the UK, if a property is intended to be rented out to multiple occupants, it has to pass the HMO (house of multiple occupancy) rules in order to obtain an HMO licence from the relevant local authority. We won’t list the specifics of what is required from a property in order to pass, but it is important you make sure the property is licensed if required. This is both the Landlord and your responsibility.

follow link Landlord Property Insurance

Landlord Property Insurance must be considered before sub letting. It is not a legal requirement, however in the event of the building being damaged by a fire, flooding etc, you may be stung with a costly bill of repairs as the tenants are now your responsibility. It is important to shop around and find the policy that best suits your intentions with the property. What Contracts Need To Be In Place

Contractual obligations such as the property owner being bound by a clause in their mortgage contract, can mean traditional subletting and tenancy agreements are not appropriate. If a property owner still has money to pay on their mortgage and their mortgage agreement specifies they may not sublet, you and the owner will need to draft a management contract.

Management contracts involve you paying the owner a monthly fixed sum for managing their property, in this case you will draft your own rental agreements. This ensures that no subletting is happening on the owner’s behalf which may infringe their own mortgage agreement.

Educate Yourself Before Doing Anything

The world of property can be difficult to navigate for newcomers and those experienced in the sector. Many potential mistakes along the way have the potential to hinder your return on investment, so it is important to first entirely understand every aspect of subletting before investing your time or money.

What is a Rent to Rent Strategy As a business dedicated to providing clear and direct advice on a range of property investment strategies, ownership and management, The Property Mentor is here to answer any questions that you may have.

go site A phrase that has become very popular with entrepreneurial property professionals taking their first strides into the property market, and one that we’ve repeatedly been asked to clarify recently is rent-to-rent. What is Rent-to-Rent?

Rent-to-rent is the process whereby a tenant elects to rent a single property from a landlord and then decides to convert it into a house of multiple occupancy (HMO), inviting more tenants to share the property by renting them a room.

The process is especially attractive to entrepreneurial professionals who wish to gain an income from a property that they’re currently renting from a landlord. This is 100% legal – providing that the landlord is aware of, and agrees to the intentions of their tenants.

Rent-to-rent can also be especially attractive to landlords with properties that they haven’t the time to actively manage, are happy taking a small income from tenancy, and agree to allow tenants to convert the property from single to a multi-occupancy. How Rent-to-Rent Works

Once a tenant agrees to rent a property, they’re responsible for making sure that the single-let cost of renting the property is paid to the landlord each month.

The rental cost of the property includes a profit margin for the landlord – once the mortgage and monthly property running costs have been accounted for. This is the single let rate and represents a monthly return on a landlord’s investment.

A multi-let or rent-to-rent property gives tenants the opportunity to make a profit margin on their rental costs each month by charging rent to the tenants they have invited to share the property.

forex rates today india The Takeaway

In simple terms, rent-to-tent is the process whereby tenants agree to rent a property from a landlord whilst simultaneously earning a rental income by letting space within the property to one or more additional tenants.


How Do I Find Lease Options

One of the more common questions investors ask about their property investment options is how to find vendors to discuss the possibility of a purchase lease. The Property Mentor can provide expert knowledge to anyone wishing to find out more about purchase lease options.

what is binary options in forex trading Targeted Approach

There is one fundamental difference between finding vendors willing to consider purchase lease options and vendors solely interested in a standard property exchange and that is how you target vendors. Investors who adopt a targeted approach will be able to match their investment goals with the ambitions of vendors.

When undertaking any form of property lead generation activity, it’s paramount to streamline your demographic and take a targeted approach. This gives investors the best possible opportunity to connect with property owners willing to consider purchase lease options.

forex volatility news Purchase Lease Defined

The process whereby tenants agree to rent a property from the owner for an agreed period and then purchase the property once they have secured the necessary finance, is known as purchase lease.

We’ve previously covered everything that you need to know about purchase leases in our video ‘What is a Purchase Lease Option?’ To learn more, click the link here.

go to link Simple Property Marketing

Given that purchase lease options cover long term property rental and eventual ownership, there are several property marketing exercises for investors to engage in.

Effective property marketing doesn’t have to be complicated. You could write a short professional letter or colourful postcard outlining your interest in renting long-term before buying a property in your local area and then distribute them to properties that pique your interest.

This approach is employed by estate agents across the UK to proactively find homeowners that are willing to sell their home. Most homeowners will have experienced receiving a letter like ‘Mr and Mrs. X have a budget of X amount and are looking to buy a property on your street. Please call (telephone number) if you’re interested.’ This is an example of proactive and simple property marketing.

The benefit to this approach is that you can appeal directly to homeowners who are interested in renting or selling their home. Each letter or postcard should be simple and friendly. Make sure that you include your contact details to make it as easy as possible for interested parties to contact you.

However, there are many other ways that you can target landlords or find tenants that are currently renting a property on a short-term contract who would prefer a long-term lease with the option to buy.

Further Actions to Consider

There’s still a wealth of homeowners that use private adverts to sell property. It’s always worth checking online and print property publications and resources. You may just find the perfect lease option.

You could also contact local or regional estate agents. They may have property listings that aren’t generating much interest amongst buyers. This gives you the opportunity to propose a long-term let as a solution.

Finding deals

The first question that property investors enrolling on our property mentoring and coaching programmes have is about finding great deals.

With some tested and proven strategies, it is possible to strike gold with each property, and raise your credibility and confidence as a smart property investor.

Zero in on Repossessed Properties

Properties reach possession stage when the owner fails to clear the mortgage on the property. Banks offer attractive discounts on such properties as they usually want to clear the pending loan as soon as possible. In addition, delay in selling the property forces them to spend on its management.

Given these drawbacks, banks show willingness for negotiations that can greatly work in your favour. Local estate agents, neighbourhood residents, welfare associations, and public records, are your valuable sources of information on repossessions.

Gather Local Knowledge and Build Trust

Narrow down your focus to a target market. Gather local information on recent divorces, bankruptcies, probate and evictions. Most of such information is available through public records. This strategy will give you a clear direction to base your efforts on.

Follow up with the people concerned through post cards, email, and phone before meeting them in person. People usually have a sentimental attachment to their properties. It is therefore essential to build trust through initial meetings and then move towards making a deal.

It is equally important to listen to the people involved to understand what they really want. This insight will enable you to create a win-win situation.

Approach Vacant Property Owners before others Do 

It is crucial to reach owners of vacant properties before they list their properties for sale or hire a real estate agent for the same. Again, gathering timely information is key to success here.

Look for properties that are unoccupied. The owner might be an individual who inherited the property but is not sure about the best way to handle it as he or she lives in another city or country. Such owners are more often willing to accept the first offer they receive simply because they want the property off their hands fast, gaining as much benefit as possible in the process.

There are also properties that are rented, but the owner is unhappy with the tenants. Such properties too are ripe deal-earning targets.

Patience, reason and perseverance are crucial to be a successful property investor

NEW Crowdfunding Opportunity targeted at UK Property Investors

Victorian terraced houses

Whilst crowdfunding itself has been around for quite some time now, this is one of the very few that is targeted specifically with UK Property Investors in mind who want to invest in developments as opposed to buy to lets from the comfort of their armchairs.

Investors have the opportunity to get involved if they wish with the buying, renovating and selling, and can learn from the ‘experts’ along the journey.

If you are interested you can invest from as little as £700 upwards, and together with other investors contributions, the money in the pot will be used to buy up disused and neglected properties around the UK, in order to renovate and then sell on for an expected profit within a period of 3 months.

The Company Quanta has an apparent proven track record, and is working with Crowdstacker; who as ‘one of the UK’s first peer-to-peer lending platforms to secure direct authorisation from the Financial Conduct Authority (FCA)

Why not read the article, check out this opportunity and see if it is for you Click Here


Would You Trade Your House for an iPhone?

It’s that time of the year where Apple release a new version of their phone and the world goes crazy.  So crazy that some guy is willing to swap his house for the new iPhone 6.

Now I’m a big fan of Apple but when the new iPhone hit the shelves, I wasn’t first in line.

I’ve heard stories from UK property investors who have included other items into their property deals to make them work, particularly when it comes to doing purchase lease options, but this has to be the most bazaar deal I’ve come across.  A man in Detroit was willing to sell his house for an iPhone. Now bear in mind the house is possibly the most derelict house I’ve ever seen but it’s the first time I’ve heard of this kind of sale.

I couldn’t believe someone would exchange a 2,400 square foot house for a phone. He’s either a massive Apple fan who is desperate to get his hands on an iPhone 6 or he is what we like to call a motivated seller.  In fact, it later appeared that he owes over $6000 dollars in taxes so I’m guessing he is most likely motivated to sell for this and possibly other reasons.

Still, I’m willing to bet he wouldn’t accept a Motorola or LG phone for his house, and that is why it is so important to establish not only why someone is motivated to sell, but also what solution will work for them, as it isn’t always the highest price people are looking for when selling their property.  Apple truly are the masters of creating demand for a timeless product.

Hats off to them, they’ve reached the stage where houses will be swapped for their products.

Check out the full story for yourself…

The Latest Line of Delegation!

As you may know, I love to make the most of life and this is my excuse for continually perfecting the art of delegation.  Whether it is in my property business or my personal life, I love to find ways to do things more efficiently either through the use of technology or by delegation.

I came across an article on queuing and whether we like it or not we all do it.  We Brits are pretty good at it. In fact, we do it all the time.

Whilst I haven’t done this, many of us even camp overnight in queues; think of when a new IPhone is released, or when a world-famous band is touring or when there is a limited edition designer handbag new into shops.  The alarms are set for the crack of dawn, the sleeping bags are unravelled and the queuing marathon begins…

Now what if I told you that you could pay someone to queue for you? Well now you can, as one particular man queues for a living!  Absolutely ingenious!

Robert Samuel, 39, is New York’s professional line sitter. For $20 an hour he’ll sit in any queue you desire, so you really can get your hands on the latest property deal if you really want to…

Have a read for yourself here

Wow, what have I not thought of when it comes to delegating my property investing activities?

Find it first with Instant Alerts

If, like me, you have a particular criteria for the type of property you are looking to invest in, and you want to be able to act quickly in order to get the best opportunities, then put yourself at the front of the queue by setting up alerts to be informed when a property hits Rightmove.

How to set up your alerts on Rightmove


Is the Government taking a U Turn on Benefit Payments?

Perhaps I have misunderstood the government stance on benefit payments.   

On the one hand the government gave the responsibility to individuals claiming housing benefit to pay their own rent rather than having it paid directly to the landlord in most cases, as it was considered important for people receiving benefit payments to learn to manage their finances.   Whilst I am supportive of individuals having and taking full responsibility for their finances, as a landlord this can have a real impact.  Should you find yourself with a tenant who is claiming housing benefit, who isn’t good at managing their money, you can be stuck with no rental income for weeks, sometimes months.  

According to the article below, “Mr Duncan Smith claims that for a ‘significant’ number of people on benefits the struggle to manage their household finances makes it harder for them to buy the essentials and to look for work”  therefore are piloting a “pre paid card which would restrict where the jobless or poor can spend their money”.  

Ironic don’t you think!  Fingers crossed this is a positive sign towards housing benefit claimants having their payments for rent also being restricted and paid directly to the landlord.  

Read the article

Pets get a pizza the action!

We’re all used to seeing offers from our favourite fast food restaurants. 50% off when you spend a certain amount

“Buy One Get One Free” deals

Buy 10 pizzas and get a free pet

No, I’ve not lost the plot completely. That last one is a real offer from a real Pizza Hut restaurant in Melbourne!

As I’m sure you can imagine; this tail doesn’t end well…

The fast food joint sparked fury with their bizarre and controversial meal deal offer. The sign which read “Buy any 10 large pizzas and get one small animal from Pets Story” also featured an image of a hamster.

Social media fury ensued, and Pizza Hut Australia had to step in to get the poster removed and the offer pulled. You can read the full story below.

While Pizza Hut was quick to comment that no animals had been given away as part of the offer, it does pose some interesting questions about what you use in your offers.

It’s no secret that an offer works, and doing something different will help you attract new customers.  They can persuade those ‘fence-sitters’ to take the plunge.  The offer you create matters.

All of the above can apply to you and I in the property investment world.  When looking for your next property investment opportunity be creative, and consider how you can present an offer that stands out from the Crowd.  Make sure your offer works for both you and the seller.  Get it right, and you’ve got a winner on your hands. Get it wrong, and it could cost you your next potential investment opportunity.
Don’t take a slice out of Pizza Hut’s book!   Read the full article