How To Scale Your Rent-To-Rent Property Business?
Do you know how to scale your Rent-to-Rent business quickly?
Discover the five key elements to successfully scale your property business, including; how to set the foundation to grow, why it’s essential to diversify and why you can’t do it alone….
I’ve been asked a lot recently how did you scale your Rent-to-Rent business so quickly? So I thought I would break down how to grow quickly, I’m going to cover the five key elements you need to do now, how I did them and how it’s important to set a good foundation first.
In case you don’t know my journey so far, I completed 20 rent-to-rent deals in my first 12 months. Initially, it took me around eight weeks to get my first deal, and then the same for the second deal but once I focused on the five elements covered in this article, I was able to complete two to three deals every month.
Here are my five key elements for scaling your Rent-to-Rent business
Consolidate
When you’re trying to grow your business, it’s tempting to focus on achieving more deals, more tenants & more cashflow. It’s always great to have a growth mentality; however, you will hit that inevitable ceiling where you need to consolidate and organise your business before you can scale further.
My recommendation is that when you have achieved three or four deals, take a step back and consolidate. Make sure you have the correct occupancy level, calculate your burn rates (how many months can you operate without any income coming into the business), make sure you have good relationships with tenants & landlords. Now is the time to perfect the service that you are offering your tenants and landlords - developing your credibility with the agents
Systemise
As you add each new deal to your portfolio at the start, the workload is going to increase. You will need to add systems that will allow you to free up your time so you can focus on new deals. When I hit around ten deals, I was spending so much time dealing with maintenance issues, utilities, administration, accounts & viewings I had no time to scale.
I will dedicate an episode soon to Rent-to-Rent systems so keep an eye out. This episode will cover building your maintenance team, management software, key safes and much more…
To find out the next three key elements to scaling your Rent-to-Rent business listen to this weeks episode below.
In this episode, you will discover:
Five key elements for scaling your Rent-to-Rent business
Why it’s essential to set a foundation first
How to diversify your leads
Why you can’t do this alone
Listen to my new podcast and subscribe! Available on iTunes, Google, Spotify and others or click “play” on the player below!
Join a community of likeminded people with ambitious property goals, where I post daily property insights and motivational content request to join my Creative Cashflow FB group here.
As always, if you have any questions, please don't hesitate to contact me directly. You can direct message me on Facebook or join and ask me your questions within the Creative Cashflow Community.
Podcast Transcript↓
[00:00:56] Hey, welcome to another episode of the podcast where we talk about all things property, Creative Cashflow and of course, how to be financially independent today, not in 25 years. And we release brand new episodes every single Monday. So please subscribe, share, spread the word and enjoy the content. So today, I want to break down exactly how to scale your rent-to-rent business.
[00:01:28] A lot of you have asked me how I managed to grow my business so quickly. I did 20 deals in my first 12 months, so I thought, let me break down five key things I think, you know, you need to do. I did them; it took me a while to to get my head around this. So it took me a little longer to scale initially. What I mean by that is it took me about eight weeks to get my first deal and then it took about another seven or eight weeks to get my second. But then I was averaging two, maybe three deals on some months for the rest of the year. And I want to show and share my experience - my journey - on how you might be able to do that.
[00:02:08] So, number one, consolidate. When you're growing a business, it's tempting to just focus on the core stuff and growth and how to grow; more deals, more deals, more tenants, more cash flow. But what tends to happen in any business is you will hit a ceiling where you then need to consolidate and organize and get things sort of stabilized before you can go any further. So what I would say is once you've got two, three, four deals, take a minute to consolidate them, make sure the occupancy's right, and make sure that, you know, you take a minute just to make sure your burn rates...by burn rates, I mean, how many months you can go without earning anything in the business.
[00:02:53] That's a great tip.
[00:02:56] I mean, when covid first struck, that was the first thing I was doing. OK, if all my tenants don't pay rent, how long can I last. Calculated it and then every week I tried to improve upon it by adding tenants or doing more creative things with my property. So you want to consolidate, make sure that you've got good relationships and that you've got, you know, happy tenants, happy landlords. Consolidate. Make sure that you're offering a great service to the tenants, a great service to the landlord, and keeping up appearances with any agents.
[00:03:27] Point number two, you're going to need to add systems and I am going to do a dedicated episode to rent-to-rent systems soon, but in terms of this podcast, you need to add certain systems which are going to allow you...they're going to free up your time to focus on new deals. When I hit about 10 deals wasI was spending so much time doing the maintenance issues, doing the utilities, you know, doing the accounts, I was doing the accounts and bookkeeping and, you know, doing viewings all single-handedly that I had no time to scale. So at some point, you're going to need to get systems in place to free up your time, you know, key safes in properties, a maintenance team, maybe a management software to manage your HMOs, maybe a channel manager to manage your SAs and certain things to make your life easier and to free up your time. Otherwise, you won't have time to scale.
[00:04:28] And I know a lot of you might have day jobs at the moment, so once you get to two or three deals, you've not quite got enough to give up your job. And you're struggling for time because - think about it - if you've got a nine to five and then you get two or three rent-to-rent deals and you've got them to manage, you're not going to have much more time in the day. So you need systems, OK?
[00:04:50] Third tip is you're going to want multiple streams of leads, multiple streams of marketing, and what I mean by this is you can no longer rely on one or two ways of sourcing deals. You need to broaden your horizons and you need to try and - I'm always saying this - you can't be constantly chasing deals. You need to set up some marketing practices so that the landlords and the agents and the deals find you. And that goes for tenant finds and also deal finds. So take some time out, add some more marketing strategies, get your online SEO marketing right, get an online presence, get your social media, try some other things to attract leads.
[00:05:43] Number four, and it's a big one. Once you've got a few deals, you're going to want to protect your downside and I think the best way of doing that is to diversify. So that means if your focussing on rent-to-HMO at the beginning, at some point, you might want to throw a few SAs in just so that you've got a little bit of...diversification, that's the best way to describe it. So what I mean is if you're reliant on HMOs and you've got a massive employer in your area that, due to uncertainty, could go bust... I've had this, by the way, guys. I've got a lot of tenants with Ryanair and Ryanair obviously aren't doing as many flights right now. So they've had to make certain cutbacks. Certain people have been granted unpaid leave or lower level of shifts, and they're struggling to pay full rent. So, you know, what you want to do is you want to make sure that you're in a position to subsidize them and help them out. So my SAs where I've got big construction or corporate bookings, help bail them out, I can give them a discount to weather this storm and help them through it. The same goes for, SA, if you know your Airbnb, Booking dot com and BBoris decides no more holiday lets, then you're going to want to make sure you've got the regular recurring income from professional clients that are going to have - hopefully - jobs to weather the storm. So diversify do not rely on one thing. In the last lock down, I knew people that had 10, 15, 20 SAs, no HMOs or any other diversification, and they struggled. So don't. Make sure that you're scaling smartly, carefully and diversify.
[00:07:33] And point number five, you're going to need more people, man and woman power. It's impossible to be your best every day. So focus on building a team of great people and they'll help you achieve great things every day, OK?
[00:07:50] So you need the right people around you. And what I did, as early on as I could, was I said, right, I need to do X, I've systemised it in the previous point, who can I get to help me? Who can do this for me? And I started doing more and more and more of that until it freed up my time. So then I could focus on the income generating tasks, getting more deals. You don't want to get caught up in running the business. They know the old saying, you know, you want to work on the business, not in the business. So you're going to need to hire people or leverage people around you to help you so that you can free up your time. Really, really key. And then the bonus is, guys, it takes a lot of work to scale a business. I'm not going to sugarcoat it. It does take a lot of work. So the most important thing you're going to need to do at the beginning is like put in the time, put in the work, you're going to have to work harder than the next, get up earlier, work smarter, find ways to leverage, build your relationships, work with agents so hopefully they can pass you deals. I've had four, five, six, seven deals from the same agent where they're just feeding me these deals. And it's really, really easy. It's no work. So they call me up, say, Simon, I've got one of those, you know, three bed, two reception room ones you love in that area that you like. The landlord's already said that they want to work with you, I've shown them your website, can you come and have a look. And I'll pop out, look, make them an offer. And the next day I've got the keys and I'm able to cashflow that property.
[00:09:34] So just to summarize, guys, five key tips in terms of scaling your rent-to-rent business. OK, number one, you're going to want to consolidate. Don't just scale, scale, scale, scale, scale, you will go to rack and ruins. Make sure you take time to consolidate and make sure that you're doing a good service because that's why we're in the game. Number two, systemize. Any time you're doing a task, write it down or video it or voice note it so that you can train somebody else how to do it. Number three, multiple streams of leads. You can no longer rely on you going on Rightmove and looking at properties, find ways to get landlords to contact you. On an average week now I get around five or six landlord leads where they've sought me out. Hey, Simon, you know, can you come and look at a property? You've done it for one of my mates. I've got a four bed. Would it work for you? That's what you need to do. Number four, diversify. Don't focus on one strategy for too long. Protect your downside and get a good balance of, SA and HMO if it's rent-to-rent you're doing.
[00:10:44] And number five, you can't do it on your own. Get people because you're going to need man and woman power to help you free up your time so that you can continue to scale. And of course, you're going to have to put in the work. It's going to be hard to scale the business at the beginning, but once you've scaled it to a certain level then you can really start to bring in people and you've got more of a budget. So you hustle at the beginning to improve your revenue and then you can reinvest that in revenue to free up your time and then scale up further. And, you know, I've got a team of multiple people now. I've got a great maintenance team, a great cleaning team, gardeners, you know, you name it. And then we've got the back office team that work on the systems. And I kind of oversee and train and help and systemize. And I work on my business most days, but I don't have to work on my business all day, every day. And when I do, I can do it from the comfort of my living room. So I hope you found that useful, guys. Please drop me a line on social media. Hit me up. If there's anything I can do to help you, please subscribe, rate, share, like the podcast. And I'll see you next Monday.
[00:11:58] Thanks for listening. For more information, check out Simon Smith online dot com. See you next time.