What is Rent to Rent?
An individual or company takes on a property for a period of time from a landlord and guarantees to pay a fixed rent to the landlord. The landlord gives consent to the third party, ‘the Renter’, to then rent the property to other tenants. ‘The Renter’ will then charge a nightly or higher monthly rate to generate a profit from a property.
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What is Rent to Rent?
An individual or company takes on a property for a period of time from a landlord and guarantees to pay a fixed rent to the landlord. The landlord gives consent to the third party, ‘the Renter’, to then rent the property to other tenants. ‘The Renter’ will then charge a nightly or higher monthly rate to generate a profit from a property.
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WHY IS IT A GREAT INVESTMENT?
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Low Start-Up Cost
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Ability to make more than 150% ROI in the First year
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High Cashflow in comparisons to other models
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Easy Exit Strategy
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Can be easy and simple to manage
WHAT ARE THE BENEFITS TO THE RENTER?
The Renter becomes the Landlord as they have taken a lease on the property. This allows them to have a great opportunity to find tenants for the property and they get to keep whatever rent the tenants pay. They generally allow more flexible arrangements with the tenants. For example, properties with multiple rooms can accommodate single tenants who rent a room with some shared areas or facilities.
WHAT ARE THE BENEFITS TO THE LANDLORD?
The rental income is guaranteed regardless of whether the tenants who live at the property pay the rent or if the property becomes empty. The ‘Renter’ would generally also take care of any damage to the property as it is their responsibility to return the property back to the landlord in the same condition as when they took it. This all gives the landlord peace of mind.
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Also, the landlord would not incur any letting, management or renewal fees. The ‘Renter’ would be expected to comply with all the numerous laws and compliance issues that an agent would generally deal with, saving the landlord time and money. The landlord can also request a longer contract with the ‘Renter’, being anything from 1-5 years. This provides more security for the landlord, so they can possibly budget long term.
