How To Set Up Your Rent-to-Rent Property Business Now (HMO & SA)
What's the first question you would ask me about Rent-to-Rent? The most common answer I get to this question is, how do I set up my Rent-to-Rent business?
Let's take a deep dive into Creative Cashflow, and more specifically Rent-to-Rent.
My foundation is now firmly set up, and I have just reached a total of over 30 deals. Recently, I decided to go back over my last 18-month property journey and analyse what I have done to date. How I set-up my business, the challenges, the positives, and streamline it for you into 12 simple steps. My hope for you is that by completing these steps, you will position yourself as an expert from day one, launch your business with speed and avoid some of the hardships I experienced getting my first deal.
If however, you're in a position where you have a few Rent-to-Rent deals already, the 12 steps can also provide great value and provide you with the opportunity to start systemising and scaling. Even if you are established and you have missed out a couple of steps, it could be having a critical impact on your business growth. Only when I had established all 12 steps the domino effect happened and things started flowing. I have been able to grow my business so quickly because of the solid foundation and structure I have in place.
So, let's start from ground zero, the number one question I get asked; how do I get started? How do I set up my Rent-to-Rent business?
To develop the 12 steps, I have gone over my property journey so far but most importantly used feedback from my Creative Cashflow Facebook Group members to find out what information is most valuable to you. (If you are not already a member, you can request access here.) The common feedback, especially from members who have invested in courses is that there is too much information, and they don't know where to start. So I've decided to make it really, really simple and explain how to get set-up so you can start looking at your first deal as soon as possible without the overwhelm.
I can't wait to hear your feedback, and 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.
In this episode, you will learn
A detailed breakdown of all 12 steps and why they are so important
What to avoid spending time on so you can get set up as soon as possible
How to structure your Rent-to-Rent company and your brands
How to look like a seasoned expert from day one!
Just a quick disclaimer - there is no right or wrong way of setting up your business; this is only my opinion based on my journey so far, this is not advice. The 12 steps have worked very well for members of my community and myself, and I hope it will add lots of value to your business too, but please do your own due diligence as always.
To learn more listen to my new podcast and subscribe! Available on iTunes, Google, Spotify and others or click “play” on the player below!
Podcast Transcript↓
[00:00:56] Hey, guys, Simon here and welcome to another episode of the podcast where we talk all things property, Creative Cashflow and how to be financially independent today, not in 25 years. And that, of course, is our mantra. So if that sounds good, you're in the right place. We release these podcasts every single Monday, so please subscribe to be the first to know. And, of course, you know, drop us a little rateing if you enjoy the content, it just helps us move up the ranks and spread the word.
[00:01:30] So as promised, today, we're going to start deep diving into Creative Cashflow, rent to rent specifically. And it doesn't matter whether you're trying to get started or you're thinking about it and you want to try and get set up in your first deal, or whether maybe you've got one deal and then the C word struck and you've become stuck and you want more deals. Or maybe you've got plenty of deals, but you're pulling your hair out because you want more systemisation so that you can step back. Whatever it is, we're just giving as much value as possible. I've done over 30 rent to rent deals now, and I just want to share as much value and content as I possibly can. So we've got a start at ground zero. And I get asked this all the time. How do you get started? How do I set up my rent to rent business? Okay. And I've got some good news. What I've decided to do is break down exactly what you need to do today to get started. And I've took feedback. A lot of people have said they go on courses, there's too much information, information overload and they don't know where to start. So I've made it really, really simple, really concise. It's 12 steps. If you follow these steps, you will get set up and. I didn't do all these 12 steps from day one, but I wish I would have, because as soon as I had incorporated these 12 steps and I reversed engineered when my business started performing, it was when I had all these things.
[00:03:06] So do all these things. If you're existing, you're already doing rent to rent and you're doing well, make sure, have a little tick box and check that you've done them all. Because if you haven't, one or two could just improve your business. If you're brand new, do them and let's crack on. Now, I just want to do a little disclaimer. There's no right and wrong way for some of these things. So these are my opinions. And, you know, it's not advice. Please do your own due diligence. It just works for me and it's my opinion. Okay. That's all. But I just want to share what I would do if I was starting again. Fresh, brand new today. So step one, you're going to want to create your limited company. And the reason I recommend doing it this way, rather than operating as a sole trader, is because it builds credibility with landlords and agents. It allows for amazing tax control and benefits, and it limits your personal liability in the unfortunate event that things do go wrong. OK, it's really easy to do. You just want to Google Limited Company. There's loads of websites that allow you to do it within 24 hours.
[00:04:18] It's about 15, 20 pounds. Don't let them upsell and upsell and upsell you can end up paying hundreds. You don't need an account and anybody can do this stuff. And just one more thing, don't overly obsess about the name of it. If you've got a great name, brilliant. But if you haven't, just call it after your name or after your partner or after your family, and then you can always choose trading names within this business. But let's just get it set up as quick as possible. Number two, you're going to want to set up your business bank account. So once you've got your company number from companies house step one, you'll be able to go on a bank and set up a business bank account which is dedicated just to your business. And of course, the advantage of this is you know exactly what's going on, exactly what's coming in and what's going out. And I always say this, a limited company is its own entity. So when you set up this limited company, it's important to really have great transparency and see it as a different thing. You can't just take money in and out willy nilly. What you do is you've got a separate entity and you need to document that stuff, you know, get accountancy advice on that, depending on your particular situation, it might be worth doing it differently.
[00:05:43] But once again, disclaimer, this is what I did. This is what I would do if I was doing it again. Point number three is it's time to create a bit of a brand identity, create a logo. So you've decided on the brand name now and, by the way, in rent to rent, you're probably going to want more than one brand name. And the reason for this is there's going to be two parts of your business initially, there's going to be the parts of business that says, hey, Mr. Landlord, we're going to guarantee your rent and then there's going to be another part of your business, which is more tenant or guest front facing. And that's going to be, hey, Mr. Tenant, move into one of our lovely rooms. And I don't believe those two businesses or websites should be combined because it's two different messages. And the call of action and the message gets confused, so you're going to want a front facing business at getting the properties initially. So, you know, you might be caught, “We'll Guarantee Your Rent Dot Com” or whatever, and it's clear that's for the landlords. That's going to be for the agents. And it's all about sourcing your rent to rent deals. And, guys, outsource this. Go on Fiverr dot com and just get somebody to do it. You should be able to get yourself a logo for 20 pounds and you can improve as you go.
[00:07:08] But first things first. Just get a logo. Step four, you're going to need a website and I remember. If you listen to my first rent to rent deal, I think it was Episode Six and I talk about, you know, people, landlords saying to me, what's your website? And I would always have to skirt around the issue and sort of apologetically admit I didn't have one, but it sucks and it makes your life so hard as the first thing these landlords and agents are going to want to know. Send us more information. And if you can just say here's our website, you can answer many of their questions and many of their sort of rebuttals via the website, so absolutely essential, you need to get a website. You can do that also on Fiverr dot com, my first website I just built on Squarespace and I did my best. And I basically said, look, Mr. Landlord, Agent, we''ll guarantee your rent, five years. We'll take on all the management and maintenance, all that good stuff and communicated my message. Step number five and six I'm going to combine. Step five is make sure you've got a professional email set up and step six is make sure you've got a local phone number. OK. And it's all about credibility and trust. This is not going to work if you're speaking to an agent claiming to be a relocation agent and then you give them Simon Smith, seven four six five at AOL dot com, as your email. It's just not going to work, you need to have a professional email address.
[00:08:56] So when you get your domain name and sort out your website, get them to set you up an email. So if you're called Simon Smith Properties, make sure your email is info at Simon Smith Properties dot com. It sounds basic, but you'd be surprised how these subtle changes just build up the credibility. Same with the phone number. Have you ever seen an advertisement for a business and it's got a mobile on? It's just not professional, so you want a local number. Not only is it professional, but it also lets landlords know you're operating in the local area and you're going to take great care of their property. Step number seven is traditional marketing. So what I used to do and I still do this now, although I do really drive my website, is I will always arrive to my viewing with a contract, which I'm going to touch on later. And a little bit of marketing material. It's just a page or two to answer their questions, frequently asked questions. What we do, who are we? Why should you work with us? And if you go to a viewing and you give the landlord a nice sort of, you know, little folder or, you know, a nice little brochure explaining what you do, it helps further build that trust, especially when you're starting.
[00:10:19] And they're going to know what they're going to have a good idea that you've not really done this before. Step number eight is key, it's digital marketing, and that's all about things like social media and a Google business, people have got to find you right? There's this sort of constant debate. What's more important, sales or marketing? What marketing is getting people in your shop? And then sales is actually selling to them, but if nobody's in your shop, what good is the sales? You've got no one to sell to. So it's so important to have that Google business. Then if you go on Google and, you know, when you're looking for a restaurant, for example, when you searched, I mean, Google, and they'll come on the right hand side and you'll see their opening hours there. Number, they might have some reviews. It might be linked to their TrustPilot. We need to set these things up so that when the landlord and agent do their due diligence, you stand up. This is why a lot of people don't get deals. They wonder why. Because you're not coming across in the professional image. A property is most people's biggest investment of their life, so they're not going to hand it over willy nilly.
[00:11:39] Now, you'll be pleased to know the next three steps are all compliance based, so there's no real work required in them. So step nine is join the ICO. And basically any business in the UK collecting or storing data on individuals is legally required to be registered with them. OK, so I recommend joining the information commissioner's office. I see oh, it's only 40 pounds. And once again, you will need your company name of registration so you can't skip through these. You're best off doing them in the order that I've laid out. Step number 10 is the redress scheme sign up. So what it is, is you're going to want to make sure that when you're managing a property, you're a member of one of the redress schemes. I believe there's currently three. I think there's three or maybe four. You've got the Ombudsman Property Services, the Property Ombudsman, and then the Property Redress Scheme. OK, I personally recommend the PRS, they're a little bit cheaper than actually the newest one. But you don't need to join until, you know, until you're really actively sourcing deals. It's for property management companies. But look, ideally, you want that stamp of approval on your website from day one because it just gives you a little bit more credibility. Step number eleven is insurances and this is key.
[00:13:07] It goes back to what I was saying. You want to make sure that you are not only covering yourself in terms of liability and you're insured, but you're protecting the property, protecting the landlord, protecting the agent, protecting your tenants or your guests. So it's essential to have the correct insurance products. Now, clearly, I'm not an insurance professional, so I can't give advice, but I opted for public liability insurance to make sure everybody's safe inside my properties, etc., and then private indemnity insurance, because although I don't give advice, sometimes when you're speaking to landlords, etc., if they were to take it that way, I want to be insured. And last but not least, guys, you need to make sure you've got your agreements and contracts. And as I've said, I would take them to all my viewings. I would share them when necessary, because what you don't want to do is pick up momentum, find a deal and then you don't know what you're doing in terms of legals. Also when you're negotiating and when you're viewing, they're going to ask you questions. You need to know your agreement. You need to know what you're offering so that you can answer these objections smoothly and reassure the landlord.
[00:14:25] So that's it. Simple as that, and don't get me wrong, guys, I understand it's a lot of things to do, but it's definitely worth doing it at the start, because once you've done these, you can just go. But I speak to so many people and they just want to go around viewing properties and offering to guarantee people's rent. Ooh, I'll rent to rent your property, not going to happen.
[00:14:46] You're not being serious. It's time to get serious now. Do these 12 steps. So in summary, step one, create a limited company, step two set up your business bank account. Really simple stuff. Step three, brand creation and logo design. Get somebody to design you a strong logo. Doesn't have to be perfect. We can build up, but you need a logo. Step four. You're going to need a website designed and you're going to want to launch that website. Step five and six professional email set up and a professional local telephone number. And I'll tell you what I did. We weren't using our home telephone number, so that became the business phone number. I redirected it to my mobile. So I was always able to pick it up. And then we offset that as a taxable business expense, which saved us money. Step number seven, traditional marketing. Don't overthink it. Just repurpose the website content in the form of a one or two page brochure. I just did it on Word. It's more the actual act of it and the process of giving something than it having to be completely perfect. And it's something they can take home to their spouse and go over. Step number eight, digital marketing. You don't want to have a million and one social media platforms.
[00:16:03] Just choose one that you think is going to be most suitable, get good at it, get consistent, get yourself a Google business page so that you're searchable and you know, you could just build from there. Step nine, ten and eleven are all compliance stuff. Nine is the ICO for data protection. Number ten is the redress scheme. I recommend PRS. Last time I checked, I think it was around two hundred pounds for a whole year. Step eleven is your business insurances. You want to make sure that your insurance is sorted, it's about two hundred fifty pounds per year. And last but not least, it's an important one. Step twelve is contracts and agreements. Don't cut corners here, guys. You need to make sure you've got the agreements with the right termination clauses and they cover you should things go wrong. So, yeah, guys, that's all for me. I hope you found this episode useful. Let me know how you find it. Feed back. Drop me a line on social media. I personally will respond to all the comments, all the inboxes. And next week, we've got a big one. We're going to start actually talking about how to then go about sourcing deals. So I'll see you then. And of course, remember, guys, don't wait twenty five years.
[00:17:18] Get creative. Thanks. Bye.
[00:17:31] Thanks for listening. For more information, check out Simon Smith online dot com. See you next time.