UPDATE (15th January 2021): Interested in the Rent to Rent strategy? Get started by reading our Complete Guide to Rent to Rent.
When you are first starting out as a property sourcer, you might struggle with finding landlords that may be open to the idea of rent to rent deals. The longer you work in the industry, the more you will build up the necessary techniques but to give you a head start, we can provide you with some valuable insight to help you identify landlords for rent to rent deals.
There are essentially two parts to this. Firstly, you need to establish the benefits of rent to rent and then we need to identify the problems that landlords might be facing.
With rent-to-rent deals, we are offering to pay a landlord a fixed amount per month for an agreed period. This could be for several months or up to five years. So for landlords that have struggled with voids, the idea of guaranteed rent is obviously very appealing. Then when you tell them that you will deal with all of the tenant management, marketing, maintenance etc. many landlords will be very interested but not all landlords have the same types of problems.
You really need to get a deeper understanding of the problems that landlords are experiencing; their main pain points and use those problems to outline the key benefits you can provide to them. So with landlords that might have struggled with their letting agency, or have spent quite a bit on maintenance, when you offer to fully manage their property this can be a very good option for them. Of course, the numbers you work out as part of the rent-to-rent will be making you money and the landlords will have hassle-free rental income.
Landlords that have suffered from higher than average voids will be really keen to work on the basis of guaranteed rent. So that big problem area for them is served by a benefit.
Other types of landlords that are good to find are ones where their properties are tired and need refurbing. The ones that don’t want to spend money on getting the property updated but are struggling with voids.
For these types of landlords, we would offer to fully refurbish the property for those with longer contracts. So you can find properties with dated features and splash a couple of feature walls, dress it nicely and it looks like a new house. It won’t cost much but it will be much more appealing as a rental property. So you offer them the ‘refurb’, the guaranteed rent, no maintenance costs, no tenancy management and many will snatch your hand off. It has cost you a small outlay but you then have cash flowing of £500-£600.
The key really is to appeal to the specific problems a landlord will be facing. Giving them a list of benefits that don’t apply to their problems won’t work, so try and find out what has been giving them headaches and problems in the past. Then work on that to offer them a solution to that problem.