RENT 2 RENT  

CALCULATOR

Subletting/ Rent to rent is a property strategy where you lease a property from the owner and then you rent it out to a tenant or tenants to make profit.

Usually, a lower guaranteed rent is promised to the owner and the property is rented as a House of Multiple Occupants or a short stay (holiday/airbnb) accommodation.

Features

1. May have a low initial investment

2. Profits can be really good

3. Not very competitive

4. The property may be taken back after a year

5. Could be time consuming

6. You do not own an asset

How would I do it?

I would personally never do it because my time is valuable and I need to use it to acquire assets, but if I were to do it…

I would look for a property with 4 or more rooms in a location with good transport links and amenities. I would do research. I would advertise a room on spareroom.co.uk for that address to see how many enquiries I get. I would ask the potential tenants what features they are looking for in a property and what they do. I would also look for a landlord who may be struggling or wants hands off rent. I would lease the property for a year with the option to extend the lease at the same guaranteed rent if I want to. I would also be doing all this in a registered company. I would then get the property compliant and rented out. I would give the tenants my handy man/repairman’s details in case of any emergencies or problems.

Scenario:

5 bedroom property rented from a struggling landlord for £1,400. Other monthly expenses £400. Property is then rented out on a room by room basis for average of £450/room= £2,250. Net profit £450.

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You can use the calculator below to do the calculations and estimate the profit for this strategy.