Rent-to-Rent is a property investment strategy whereby an individual rents a property from a landlord and subsequently sublets it, either as serviced accommodation or a House in Multiple Occupation (HMO). The subletter aims to rent out the property at a higher rate than the cost paid to the landlord, thus generating profit from the difference as compensation for the risks and services provided.

To be financially viable, the rent-to-rent strategy requires a substantial margin between the rental income received and the expenses incurred. This model allows for earning potential without the substantial initial capital often necessary for traditional Buy-to-Let investments.

HMOs: Success in this area depends on achieving a significant difference between the rent collected from individual tenants and the rent paid to the landlord. Both options involve considerable setup costs.

HMO Article 4 Direction 

Article 4 Direction relates to changes of use from a house or flat (occupied by a single person, couple, or family) to a small HMO (a house or flat shared by between 3 and 6 unrelated people).

Normally, planning permission is only required for a change of use from a house or flat to an HMO where more than 6 unrelated people will occupy the dwelling. The Article 4 Direction will mean that planning permission will be required for the change of use of a flat or house to an HMO where 3 or more unrelated people will occupy the dwelling.

The choice of location is critical for both strategies. Properties designed for serviced accommodation should be situated in areas popular for short-term rentals, although this carries the risk of potential void periods, during which the rent-to-renter still incurs ongoing expenses. For HMOs, the property must be in an area favoured by tenants likely to share accommodations to ensure steady demand.

In defining your gold mine area, the most important factor to consider are areas that are suitable for HMO strategy.

Here the summary:

For this particular strategy, select the Rent to HMO template, to speak with an agent who advertised the property you are interested in, please remember that lead generators are fully customisable.

R2HMO Template the strategy is focused on searching for HMO properties outside Article 4 Area. And to spot properties where you can add rooms to rent out, without the need for planning permission. Be careful with areas like Birmingham and Cardiff because these are HMO Article 4 areas.

Select R2R (OpenRent adverts), this template will give you vendor information, such as address and contact number. This template will give you the opportunity to speak directly to vendors or property owners, because rent to rent 

Motivation Indicators help to pinpoint motivated sellers, enabling you to promptly make well-informed decisions when selecting the most suitable properties.

Here are various methods to recognise signs of motivation:

a) Prioritising Back & Reduced properties can streamline your search and save time.

This approach targets the most motivated vendors based on your settings, enhancing the efficiency of your search.

In this category, properties have had a price reduction re-entered the market, signalling a motivated seller. Additionally, we can filter for Below Average Price, typically within -80% to -10% of the Average Asking Price in the area, aligning with our initial preferences.

b) Property owners may regain motivation when a property, previously under offer and subject to contract, returns to the market with a reduced price. This renewed listing signals increased determination to sell.

To evaluate if a property offers good value, less void duration, as compared to others means the property is good for rentals, since it is being tenanted in a short span of time.

Located just below the map, this button allows you to view other properties in the neighbourhood that match the criteria of the property you are considering. For example, properties with the same number of bedrooms, in the same postcode, and of the same type. Click on it to be directed to a new tab where you can view the comparison results.

Located just below the Comparables section, this segment provides specific details for the postcode district. It features key metrics such as the Average Asking Price, the Average Time properties are on the market, and the Average Time they remain under STC (Subject to Contract).

Lead Generators identify potential leads and locate motivated sellers, while the Sourcing Pipeline centralises your efforts. Each stage of the pipeline has specific actions, clear objectives and set timelines for completion.

To arrange viewings for properties in your pipeline, click on the property card and select ‘Add an Action’. This opens a small window where you can choose your preferred viewing date and time. You can also synchronise the viewing with your personal calendar. For more details, refer to this ARTICLE

Adding tags to your properties makes it easier to locate them within your Sourcing Pipeline. You can add or modify tags on your leads and sort them accordingly. For more detailed instructions, please refer to this ARTICLE