Is Rent-To-Rent Passive Or Another Job?
Is Rent-to-Rent just replacing your day job?
Discover how passive a Rent-to-Rent business is, how your workload will spike and what happens when you scale to 10 deals plus…
So, how passive is rent to rent? The first thing I want to point out as a disclaimer is it depends on what you're comparing it to.
If you are working a 40 hour work week, is Rent-to-Rent passive? Yes. I have never spent 40 hours per week on my business. I would struggle to find that amount of time. Don't get me wrong, and I could probably find that amount of time to work on the business and perfect the systems right to make it more hands-off for me.
It wasn't until I was approaching ten deals that it started to feel like a full-time job. However, by this point, you should be cash flowing enough money to start outsourcing. So it is still a part-time job for your worst-case scenario.
Let me break it down a little further. When I first started, I was working four days per week. I would allocate one or two days for viewings, which would be half days. I would give time each day for calls, so that would amount to five-six hours per week.
When you get a deal, you will need two/three weeks to prepare the property. This time is intense, and the amount you put in will depend on the amount of money you are looking to save compared to outsourcing. However, when have let the property let as an HMO or SA, it does become mostly passive again.
Listen to the rest of this weeks episode to find out how my business and time demands changed when my property business scaled to 10 deals plus.
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Podcast Transcript↓
[00:01:00] Simon here. Welcome to another episode of the podcast, where we talk all things, property, creative cashflow, and of course, how to be financially independent today, not in 25 years. And on this show I'm going to be discussing is rent to rent, really passive, or just another day job, another nine to five. So stay tuned for that.
[00:01:28] If you are listening, if you're out there, I would love, I would love you to do me one favor, head straight over to YouTube. Search Simon Smith online and make sure you subscribe hit the thumbs up button, hit the bell for notifications, even comment on a few videos to help us grow that because the podcast is the visualization.
[00:01:52] Um, excuse me. The YouTube is the visualization of the podcast. And for the first time ever, I'm sharing behind the scenes footage, you're getting, see my properties, my. Management of my business on a day-to-day basis. So how passive is rent to rent? The first thing I want to say as a disclaimer is it depends what you're comparing it to.
[00:02:17] If you're working a 40 hour work week, is, is rent to rent passive. Well, yeah, because I tell you now I've never really spent 40 hours a week on my interim business. Never. I would struggle to find that amount of time. Don't get me wrong. I could probably find that amount of time to work on the business and getting the systems right.
[00:02:40] Um, to make it more hands-off for me, but it doesn't take that long. Even we have a decent portfolio. I wasn't spending that amount of time. It wasn't until I hit 10 deals that then it probably. Um, it probably started to become a full-time job. And guess what? At that point you've got enough money to outsource it.
[00:03:03] So it's still only a part-time job for you, worse or best whichever way you look at it. So in summary, let me just unpack that. When I started, I would be working four days a week, say I'd allocate one or two days for viewings, which would be half days. Um, and then I'll do a few calls every day. So it's probably about what five, six hours a week.
[00:03:29] When you get a deal, you then going to need two weeks or three weeks to prepare the property. So those few weeks will be intense and you'll put in a lot of time, depending on how much money you want to save, how much you're willing to outsource. You could be at the property a lot. Once the property is set up and it's let out.
[00:03:48] As an HMO or fully set up to run serviced accommodation. It goes pretty passive again, because if you've done your job, right, the property will get tenured or they'll be bookings and you will get your income simple as that. At that point, you know, one, two, three, five property. It shouldn't take you more than five hours a week should not, especially if you've got the right systems in place.
[00:04:14] It wasn't until I got 10 deals that it then constituted to be a full-time job. And as I said, that's when I decided to outsource, get somebody else on board. And then it went from being, say 40 hours a week back down to 20 for me, or even 10. And the new person did 20, 30 hours and they did all the heavy lifting.
[00:04:38] And I did the parts that added the value. Or the why's known as income generating tasks. So you need to systemize all the maintenance or the refurb stuff as much of the bookkeeping and accountancy, as you can, as much of the cleaning that admin, all those bits, you want to outsource the utilities. Oh, if you're, if you, if you've got HMO or you're doing rent to rent, or you're doing an essay, you've got quite a few units.
[00:05:08] Talk to me. Uh, hit me up on Instagram, DM me and let me know how annoying utilities are when you've got multiple properties is a nightmare. Um, there's a few little tricks that you can do for that, but yeah, it's, it's it's so time consuming, you've got to outsource that as soon as possible. Now what happened for me was got somebody on board at about 10 deals.
[00:05:33] And when I hit 20 deals, they. Was in a position where they unfortunately couldn't work with us anymore, personal reasons. So it was just down to little me again, um, that, that sucked. Um, but at that point, it then made sense for my wife, Lucy, to work within the business with me. So we pulled her out of her job.
[00:06:01] Um, and then soon after that, we also ended up, um, getting my mom involved and then we got another member of staff as well to help. Um, and we've just built it more and more and more, and we've had more maintenance staff and more systems in place. We've got a garden in team. We've got a cleaning team just to basically make it as passive as possible.
[00:06:29] But I think it, it just depends what you want for me. It's like, if you're currently doing something you hate 40 hours a week and you can then put 30 hours into something that you love, that's building your own business then does it need to be passive? It's replaced your income. It should replace your job.
[00:06:51] And as you begin to grow, you'll have a bigger budget to outsource more and bring your work hours right down at the moment. If I spend 10 hours a week on my business, in terms of managing existing portfolio, then something's gone wrong. It's it's not that I do, you know, do a morning here and afternoon there.
[00:07:16] Maybe a half day, you know, extra just to work on systems and stuff here and there that's it. And then I've got systems in place and a team around me to, to help and to push things forward and to free up my time. So to anybody that thinks, all right, it's not passive. It's just another job. I'll be like, it depends.
[00:07:41] If you are currently a high earner and earning 80, 90, or a hundred grand a year and working 60 hours a week is rent to rent going to be for you. Probably not. Probably not, you'd probably be better off investing some of that money into completely hands-off investments. Completely. However, if you're part time or if you work for yourself or if you're trying to get out of your job, Dan, don't worry about how passive it is.
[00:08:13] Get home with it, get some deals, get some cashflow. And I always say this, Hey, I don't mind spending time on my business because. I, and I didn't say this to brag, I'm just saying, um, because I've created an economy now where I can get it when I want, um, I can work when I want, I can work from wherever I want in the world.
[00:08:34] I can look after my friends and family, I can work in my dressing gown in my living room. I can work from bed. So that's passive enough for me. And as we grow, we outsource more and more and more to free up more and more of my time. So drop me a line on Instagram. Let me know, how are you getting on? How passive is your business?
[00:08:56] How passive do you need it to be? Uh, drop me a line Instagram at Simon's with our line. I'd love to have a conversation about this. Also 6:00 PM. 6:00 PM on Thursday. Join us in the rent to rent property club on club house. I'm going to actually do a room while we do a room every Thursday, 6:00 PM. This week it's going to be on the podcast is title.
[00:09:20] Um, you know, how passive is rent to rent? Is it just another day job, another nine to five. Hope that's useful. I'll see you next week. And remember don't wait 25 years. Okay, crave.
[00:09:46] Thanks for listening. For more information, check out Simon Smith, online.com. See you next time.