How to Earn Money from Other People’s Property
Property in Europe (Photo credit: Images_of_Money)
The UK is suffering from huge shortage of housing, which is growing year by year and it has never been a better time to be a landlord. However, whilst the interest rates on buy-to-let mortgages are at an all time low, since the credit crunch most lenders now require a whopping 25% deposit, which has made it almost impossible for all by the very cash rich investors to build a property portfolio. However, what if I told you of a way that my daughter and I generate over £5000 per month from other peoples’ property? Read on to learn more…
Do you need to own?
Cash is certainly king, especially since the credit crunch. The problem with ownership is that you need to come up with the money for a deposit, which is usually around 25%. This can severely limit the number of properties that you purchase, since your finds will soon get tied up. Now some investors will argue that ownership is essential, as otherwise you will not benefit from any capital gains in the future. Whilst this may be true, for me, the reason that I wasn’t to build a portfolio is the cashflow, i.e. the money it put in my pocket every month. The problem with investing for capital gains is that you don’t see the money today. Instead, you are hoping that property prices rise so that you can take advantage in the future. So if you are investing for cashflow and like me, don’t consider ownership to be essential, then what’s the alternative?
Rent to Rent
Simply put, this is a strategy whereby you can take over a whole property from a struggling landlord and then rent the room out on a room by room basis. Since you are renting the property, you will not be required to stump up the 25% deposit that would be required if you were purchasing. We mainly rent the property as a corporate let and then rent the rooms out to young professionals between the ages of 23 and 35. Normally, the properties will require a light refurbishment to bring them up to the levels expected by our tenants. On average, this is around £3500 per property.
The Results
When we learned about a way to make a profit on property that we did not actually have to own, it sounded appealing. However, the results have been truly amazing. We now make an average of over £500 every month for every property that we manage and the most amazing thing is the speed in which this can all be set up. We have been able to find properties within a few days and then after that, we probably only spend a few hours a week managing them. Within 6 months we had 9 properties making us in excess of £5000 per month.
Is this for everyone?
So what’s the catch I hear you say? Well, you do have to be persistent. When we first started many lettings agents just didn’t get it and we were even told to leave their offices a few times. However, we adapted our approach and now have created a successful system that could be replicated pretty much anywhere in the world. Also, you do have to deal with people. Always treat your tenants with respect, but don’t try and be their friends. If you are too nice, they will walk all over you. Be firm but fair. Remember, this is a business and you must be professional at all times. If you can do these things then there is no reason why you can’t emulate our success and start building the financial future that you and your family deserve.
Francis Dolley is the UK authority on this rent to rent strategy and now organises courses to teach other people how they can successfully build a portfolio of properties that they don’t own, yet generate an income.
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Category: Business
