What Covid-19 Has Taught Us About Rent-To-Rent?
How has COVID-19 affected your property business?
Discover the top five things COVID-19 has taught me about Rent-to-Rent and how I have applied the learnings to my property business…
In this episode, I am going to be running through the top five things that COVID-19 has taught me about Rent-to-Rent.
1. Disruption creates massive opportunity
We are currently in a renters economy, which means there are more and more people looking for rental properties. Due to the uncertainty currently, I have seen an increase in demand for people looking for a room with fixed rent, inclusive of bills, so it is easier to control their costs.
COVID has generated an increase in demand for Serviced Accommodation due to people choosing to holiday in the UK. The fear has created around travel, combined with reduced disposable income means a huge spike in demand.
2. Cover your downside
Rent-to-Rent, like any business, does not come without risks. You need to make sure that you cover your downside, which is why I developed my COVID clause to reduce my risk. In recent months I have become very, very selective on the properties I am choosing and ensuring I protect myself with my agreements.
3. The importance of diversification
I think this is true for any business, and it goes beyond property, you need to have multiple streams of income. I have made sure within my property portfolio that I have diversified effectively. I have a mixture of Rent-to-Rent HMO’s targeting, professionals and students combined with Serviced Accommodation properties. I have also purchased properties to safeguard my income going into the future.
The more you diversify, however, the more critical it is to invest in the right education and have systems in place to manage your business. Diversifying your portfolio also comes with risks if you are not able to put the right plans in place.
In this episode, you will discover
The top 5 things COVID-19 has taught me
Why we are in a renters economy
Why diversification is critical to your success
How systems can help you in times of uncertainty
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Podcast Transcript↓
00.56 - What has COVID-19 has taught us about rent to rent? That's the topic of conversation for today's podcast episode. If you're brand new to the show. Every single Monday we talk all things property, creative cash flow, and how to be financially independent. Not in 25, years. Don't believe the hype guys, you can do property, and you can do it quickly. If you get educated, take action and get creative. And that's what this podcast is all about. I always felt like, people made property feel so complicated when I was before I was involved in property, and now I want to just share and make it as simple and easy as possible what of my mission statement is just to help and change as many people's lives through property because boy. It's massively changed mine. So, if you like the sounds of that you are in the right place. Every single Monday brand new episodes, subscribe tell a friend tell your mom tell you that, and post it on Facebook, if you like an episode, please share it. You know, spread the word, post it. Let's get conversations going let's get more people educated in property, and let's get more people relying on you. So you don't have to worry about your employer. Your boss, a job that might not be there tomorrow. Okay, that's what it's all about. So five things that COVID has taught us about rent to rent. The first point is properties going nowhere. It's a core need. Okay. So even though there's been disruption, I've seen massive opportunities and really resilient demand throughout. We are in a renters economy, which means more and more people are going to be looking to rent. After this, because they can't buy more and more people are gonna want a room with a fixed rent inclusive of bills so they know where they're at. And guess what, more and more people are going to be Holiday Inn in the UK next year, which means great news for serviced accommodation. You know, there's a lot of fear around travel, and not only that but a lot of people just aren't gonna be able to afford to go abroad next year that's really so huge demand. Point number two. You've got to cover your downsides. Look, rent rent does have its risks. So you need to make sure that you cover the downsides. And that's why I developed my COVID claws and a few other bits and bobs. I'm very very selective on the properties I'm choosing at the moment and I'm making sure I get the right terms to protect my downside. People who have not done that they've lost properties, they've lost money. They fallen off. So, you know, a word of warning there. Got to cover your downside, point number three. And it's a big one. You need to be educated. There's so much that goes on, under the surface. It's not just a case of, you know, going bad finding a landlord and saying Hey mate. I'll guarantee your rent. Yeah, five years and good. It's not that. You know what you want to do is you need to really fully systemize strategize and plan things to cover your downside, and that's why I'm in the process of finalising a new system, which is the 10 stages to recall it stages, 10 steps, 10 stages of going from zero experience of rent to rent to being a bit of a rent to rent Pro, having a good few deals systemising, taking yourself out of the business. So you need to get educated. Point number four diversification. And I think this goes beyond property. You need to have multiple streams of income. You shouldn't be too reliant on one thing right now. So, you know, even rent to rent, like, I've got rent to rent, but I know that I've needed to plan. Other seeds, so I've been purchasing properties. So that I've got them, you know, to fall back on
05:38 - my, you know, we currently own three properties, we've got to going through legals at the moment. And maybe a six, which means cash flow from the personal properties we own is around four K. And we're hoping to push that towards 10 K over the next sort of 18 months. So then, you know, you've got that locked in. Same goes for rent to rent, you want to lock that in but you also need to make sure that you're not relying on just HMO or just say, you know, you need to diversify really, really, really carefully. And that's what it is right now guys okay diversify, which means by the way more education because you've got to know more stuff to be able to do it. And, point number five, which is a really really interesting one, is the logistics, have been tricky, but it's kind of forced us to systemize more, it's forced us to systemize more. I feel like, COVID-19 has forced a lot of people including myself, to work on their business, not in. We had a massive test this week, we did a rent to rent renovation. And I'm telling you now guys. When I first started, I was doing the viewings, doing the deals, finding the tenants responding to everyone, sending the agreements, signing the agreements, doing some painting and decorating picking up furniture from Facebook market going to IKEA going to wilcos, just in the property, like, Guys moving in the tenants viewing the tenants, it was mental. Another latest deal was amazing because I'm actually working with Marlin t on a big massive shout out to Jackie. And we're in a new area. We've got a team on board now, so I literally went to the property pretty much to view it, and tie the deal up. And then I went again, when we got the keys. And then I went again, the day of the photoshoot, and everything else has just been done an outsource. So, it's really forced me to systemize that bad work on other stuff. Get more deals. Get the process is in place, and help a lot of people on their journey as well. I've now helped 10s of people get started in rent to rent. And, you know, hundreds of people in the community, which is amazing, it's so rewarding to see people change their lives through property. So guys, yeah, that's the five things I feel like we've learned and I feel like we definitely need to just internalise resonate with. And remember, you know, because this will end when it ends. People are going to need a place to live, when it ends you're gonna need another income stream. Okay, and rent to rent is amazing for that.
- 08:51 let me just summarise and go through that so the top five things I think COVID has taught us number one property is going nowhere. The demand and opportunities are there, if, if anything, I've seen more opportunities to get properties. Number two, you've got to cover your downside, specially at the moment, cover your downside. I've developed my own COVID clauses, and bits and bobs to cover my downside, and it's meant, actually, that even during COVID. I've been able to take on new properties, and I've also been able to give one or two back that weren't working. Okay. No money lost. Number three, education is key. Got to get educated to make sure that you're able to cover your downside to make sure you can identify the opportunities. Point number four diversifying. It's not enough just to be doing rent to essay. First lockdown people doing rent essay, we're struggling panicking because they didn't have the consistent income they didn't have the diversification, and vice versa, if you just go HMO, and everybody starts losing their jobs, you're going to be struggling too so make sure you strategically carefully plot to diversify doesn't mean doing everything from day one, but it means being aware of it. You know, and point number five, logistics, it's really forced us to systemize and work on the business, not just in. So I think it's taught us that we, you know, for this like latest refurb I've done has been the smoothest easiest one of the best refurbs I've done, and COVID is forced that. And it's allowed us to do several refurbs at the same time, and me still crack on and get new business. So that's it from me. Um, how long is this gonna last, we don't know what I do know is huge opportunities right now so if you're thinking about it. Please get started, it's a great time to get into this space, especially to acquire properties, I'm seeing a lot of landlords selling trying to get out of the market. So if you're observing the masses and doing the opposite. Now it could be your time. Anyway, hope you found that useful please do me a favour, let me know, give me feedback, let me know what you want me to talk about on the show, let me know which episodes you particularly enjoyed assignment Smith online, on Instagram. And of course, guys, don't wait 25 years, get creative.
- 11:47 Thanks for listening. For more information check out Simon Smith, online.com, see you next time.