The Rent-To-Rent Approach
If you are wondering how to make the best profit from investing in rental properties, you should certainly consider a rent to rent property. You can expect to make more profit than you would by owning a single property with a mortgage. In a rent to rent property, you can enter into a multi-let situation, which will give you the following advantages:
First and foremost, you will have a diversified income. When you have multiple different tenants in your rental properties, there is much less chance of you losing all your income at once. Even if one tenant vacates the property, you still have the others there who are continuing to pay rent to you.
This makes it easier to have a consistent flow of income, helping you to pay your bills more reliably. A single tenant will only be willing to pay a competitive price for your property, whereas if you have many small rooms for your tenants you may be able to rack up a larger amount of money with the price of all the rooms combined.
Additionally, you will most likely have less vacant time if you have multiple tenants, which you can manage with property manager tools, instead of a single tenant. Rent to rent means you do not own the building you are letting out. Instead, you are renting a dwelling from the landlord and then sub-letting the various rooms out to other tenants.
In this way, you can get out of the rental property market relatively quickly and easily, depending on the terms of your rental contract. You don’t have to worry about paying off a mortgage or selling the home; you will simply not renew your contract any further.
Why Don’t Landlords Just Multi-Let Themselves?
Are you considering investing in the rent to rent property strategy? If so, there may be one burning question on your mind, and this is; ‘why don’t landlords just multi-let themselves if it’s such a lucrative deal?’ You’d be right to question this, and that is why we have put this part of the post together.
There are lots of landlords that find themselves in a position whereby they’re no longer interested in the responsibilities that come with being a landlord. Indeed, some have ended up with rental properties unintentionally because of the economic crisis, which meant they were unable to sell their properties.
There are then those who have moved to a new location, and thus find it difficult to manage their rental property while others are retiring, and they simply don’t want the hassle. These are the types of landlords that will be interested in allowing you to sublet their property.
And let’s not forget, the rent to rent strategy offers them many benefits as well. Landlords can have the security of rental payments every month, with no late or missing payments. Other safety nets include not having to deal with any tenant queries or management responsibilities while also being assured that all of their tenants are vetted and carefully chosen.
Landlords will also have the guarantee that their properties are maintained to an exceptional standard, and small maintenance jobs will be included too.