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Is anyone doing Rent 2 Rent on single lets? I understand there is a huge benefit of R2R on HMOs/Multi Lets etc, but I can't seem to find many people online talking about single lets for R2R, and wondered if anyone could shed some light as to why. I know it is less profit, but it is also way less hassle, and there's a lot more houses to choose from Nationwide. So I am interested to know what are peoples thoughts about R2Rs on single lets?
The answer is very simple. Rent to rent is based on factoring. That means paying a monthly amount for the asset and then charging it out at a higher amount to someone else, and the difference is the gross profit you make.Doing R2R on single lets may not have the margins to make it financially worthwhile. Even doing it on the basis of renting out individual rooms, the margins can often be very slim and with one room void you could be in a negative position.It would only work if if you got the property at a discounted rent and were confident of being able to let it out at a high enough rent to deliver a net profit. This is the model Northwood use, but they have scaled this us, so if one property does not perform, they can cope with that. They also know their locations very well so can judge which properties would work on this basis. A small private operator may struggle though, especially if they do not have sufficient financial resources to cope if a property does not perform.Hope that helps?
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
We are doing R2R successfully with a handful of single let properties. (Moderator note: Rest of comment removed for being a “pied piper” post).
The way I see it is that if a landlord is struggling with a property because they bought in an area they live a million miles away from where they live, then surely it is one of many good ways to help ease their mind for a while, the landlord would be happy with a guaranteed rent albeit at a lower rate, and I'd still be making money given the amount the landlord would receive would be slightly lower, I know a multi let would earn more, but if it's in the right area then I think a single let would work too.