Nine Secrets To Rent-To-Rent With Low Money

Can you start in Rent-to-Rent with a low initial start-up capital?

Discover my nine top tips to effectively use your start-up capital at the beginning of your Rent-to-Rent journey…

One of the most frequent questions I get asked is can I be successful in Rent-to-Rent with only £3 to £6,000.

In this episode, I will run through and break down nine secret tips that I think can help you achieve the goal of being successful in Rent-to-Rent with a small initial investment. 

So let’s get into it - here are my top nine tips to get started in Rent-to-Rent with low start-up capital:

Number One - Get educated. 

If you’ve done your research, you will know that property education can be expensive, so you will need to be resourceful and creative. There is a lot of free content out there on Youtube, Podcasts and Books. My recommendation would be to find an educator that you connect with and then immerse yourself in their content. Then, once you feel you have 95% of the information you need, I would start filling in the gaps by speaking to other people at the same point in their property journey. 

Number Two - Sweat equity

Try to save money where you can by doing the work yourself. Let me explain this with an example. I spoke to someone the other day and they came to me with advice on a quote they received for a website for £2.5k. My response - hell no. If you don’t have the funds, you need to be resourceful and put the work in yourself. When I started, I was getting up at 5 am to work on my Squarespace website, which cost me only £15 per month. 

Number Three - Legals

I’ll be honest with you. There isn’t a way to cut corners here. You are going to need to invest in the correct agreements. However, if I were on a really low budget, I would speak to some solicitors, get some quotes and be prepared to purchase once I started to gain some momentum, so there is money in my account for longer. 

Number Four - Avoid Letting Agents

Forget Letting Agents. Generally, they will want to charge you a company let fee, and they will like to request a deposit plus a months rent as soon as you get the keys. Especially if you are down south, this will smash your budget. 

If you have a low budget, you will want to focus on direct to vendor. 

Number Five - Save costs on deal sourcing

Forget using expensive deal sourcing strategies. As an example, you don’t want to be spending hundreds on sending out Landlord letter campaigns. Instead, keep your deal sourcing simple, explore your chosen area, speak with people and try and find someone with a genuine problem you can solve. 

Listen to the rest of this weeks episode to discover the final four tips to starting in Rent-to-Rent with low investment capital... 

Podcast Transcript↓

[00:00:00] One of the most frequently asked questions I get is I've got 3, 4, 6 5k. Can I do read to rent? And how do I do someone based video? I'm going to break down nine secret hugs, I think can help you achieve that goal. If you're brand new to me, I'm Simon and I've dedicated my life for the last three years to rent, to rent hate Shemot NSA.

[00:00:25] Seeing it all, I've done it all. I've done countless deals all over the country. I've helped other people do deals all over the country. I've all I want to do is give back and help you. Yeah. I'm not trying to sell anything. This is just value. So if you like content like this, make sure you subscribe right now for the weekly content.

[00:00:46] So let's get into the video. How do you do rent to rent with. Number one education. If you've had a look, you will know that property education can be expensive and there for you're going to need to be resourceful and creative quick disclaimer, some people would say, use the whole 5k to get educated. Yeah, then find yourself an investor.

[00:01:09] Once you've got the knowledge, they've got the money, you've got the time of knowledge you can J V and that would be a good strategy. But for this video, let's assume all you've got is the 5k. What should you. So property education can be expensive. And the last thing you want to do is blow your budget on education on a course.

[00:01:31] Right? So what I would do is I would get very resourceful. I'd pick somebody that you connect with on YouTube, on podcasts. I would immerse yourself in the content. I would love. To the highest degree and make sure that you've get 95% of the info and then piece together the gaps by speaking to people that are doing it, you know, most people can spare five or 10 minutes to point you in the direction.

[00:01:57] And if you need any help from me or any questions, just comment below, but try and save money here. Okay. Try and save money. Obviously, you know, I do mentor into, I probably shouldn't tell you this, but I'm just keeping it real. You got. Can't afford me right now. So learn this stuff, get resourceful, and then get somebody just to give you that last few percent number to set up is going to have to be.

[00:02:22] So you can't be going and spending a grand on the website. I had somebody come to me the other day and set up in two and a half grand for a website. I was like, no, hell no, you need to be getting up 5:00 AM. Like I did get an, a Squarespace account 30 day free trial building your website and it being 15 pound per month.

[00:02:43] Okay. You're going to need the ICO. You're going to need the property Regis scheme. You're going to need insurances, but all of those can be. For less than 500 pounds. Number three is legals. And I'll be honest with you on this. You can't really cut corners. You're going to need to invest in the correct agreement.

[00:03:04] Are you? There's just no escape in it. So don't cut corners here, please. Whatever you do, make sure you get the. However, if I was on a really low budget, I would speak to some solicitors, speak to some people that could offer me the agreement. I would get it lined up and then I would get it once I'm starting to build momentum.

[00:03:25] So the money's in my account for longer. Don't go out there by an agreement off the bat and then like, you know, not getting a deal for years. That's my advice. Number four, forget letting agents. Yeah. The reason being they're going to want to charge you a company lab fee. They're going to want to charge you a deposit.

[00:03:45] They're going to want you to pay a month's rent as soon as you get the keys. So once again, it's going to smash your budget quickly, especially if you're down south. So if you haven't got much money, you need to pull all your attention on getting direct. Next is forget expensive deal sourcing strategies.

[00:04:06] That means you don't want to be spending hundreds on letter campaigns. Yeah, you definitely don't want to be using no deal source. And that's going to charge you three grand before you get started. So keep the deal sourcing simple, get in your environment, get in your area, speak with people and try and find somebody with a genuine.

[00:04:26] That you can fix number six, you know, that you need to be direct to vendor. The next thing that's going to be key is selecting properties that need little to no. Simple. We don't want to spend too much money on somebody else's property. If we've only got a few grand, so find a property that doesn't need much work that just needs furnishing.

[00:04:49] And if you're looking to do an essay or hate Shemot, you might even be able to find a deal with furniture. I've had several deals now where they've been fully fledged hate most of all the furniture. And I've only had to spend a few hundred pounds. So it's gonna take you a bit longer. You're gonna need to be patient and take your time, but it is definitely possible.

[00:05:11] I promise you top tip just because the property needs work doesn't mean you need to be paying. So, if you do find a property, that's a bit tired, have an honest conversation with the landlord and say, look, I can definitely help you in terms of you being hands free and take on all the management and maintenance and guarantee your rent.

[00:05:33] But I can't afford to replace all the carpets and the paint in and the kitchen. You're going to need to do that. Or you're going to need to fund that our manager, you fund it, and then I can guarantee your rent for five. Number seven and I've touched on it. Do not pay deposits. Some landlords will want you to put a deposit down.

[00:05:54] If you've only got five grand, you can't afford it. Okay. So unfortunately you need to say. You know, in terms of the cashflow of the business, we're not going to be able to pay a deposit. We would rather invest our money into your property. Now, one little hack here is if the landlord is absolutely adamant that you do pay a deposit, you can get no deposit insurance, which means you just pay monthly.

[00:06:21] Okay. And. So that can be a good win-win. Next up is a preparation period. So what I did in the early days was I would negotiate a few weeks. Rent-free get the property ready really quickly, and then let the property out towards the end of the period so that the cashflow would help to pay. You know, to pay for the deal it paid for the first rent.

[00:06:48] Let's take an example. So you've got 5k and you spend a grand on getting set up when the agreements, ballpark. And then let's say, for example, you spend three and a half grand on the furniture and the. You only got 500 pounds left and the guaranteed rents are grand. You're struggling to afford it. Well, if you get the right rent free period, and you managed to get clients or tenants or a booking, you could cash flow before you have to pay them the first month rent.

[00:07:16] And that is the ultimate leverage little disclaimer here. That's not easy. And you should always try and make sure that you're able to guarantee the landlord. The last thing you want to do is rely on what I've just said. It get to the time where you need to pay them rent, and then you default month one.

[00:07:35] Okay. Not encouraging that and touching on that point, even though you've got the 5k, it might be a good idea to line up a little bit more money. Should you need it? Even if it's just for a short period of time, my first. I was a few grand short. I managed to borrow the money and pay it back within six weeks.

[00:07:57] And then I managed to get the cashflow rate in Japan a month from there. I was able to build up last but not least. And once again, I don't say this lightly, I'm not a financial advisor and I'm not encouraging people to do this, but another key way of potentially getting started and venture out with 5k is getting some kind of finance or credit.

[00:08:19] To help you out. Once again, can't stress this enough, this is not financial advice, but this is something that I had to do. Okay. I did this. So the only reason I'm even saying it, I had three grand. I needed to put a few thousand pounds on a credit card for a short period of time. I paid it back and fall and then move forward.

[00:08:40] Another option is a family member might be willing to give you a smaller. Just to get you started. So is it possible? Yes. What would I do? I would do those nine things implement as many as possible. And then the key thing is going to be being consistent and being paid. Because if you've not got much money, you're going to need to organically grow this business from a standing star.

[00:09:06] So it might take you longer than somebody. That's got a few thousand to spend on a mentor, a few thousand to spend on marketing. So just take it easy, acknowledge that you've not got much money. It might take a bit of time. And then just get stuck in and be consistent every single day.

[00:09:36] Thanks for listening for more information, check out Simon Smith, online.com. See you next time.