R2R or rent to rent is a form of renting where the person rents out your property, through a company, and then sub-rents it to another person. Here, they take the responsibility for the rent and send you full monthly payments as you see fit.
A person who uses the R2R strategy is essentially a middleman who leverages your property to gain a bit of profit while also paying your monthly rent and bills. This process is not as easy as it sounds. It’s a complex strategy that involves many legal complications. It’s not as easy as you see on YouTube videos, where they tell you “1-minute hacks”. The R2R strategy can be practiced and bring in good profits, but that is only if you do your research and do not fall for any kookie shortcuts.
How to execute an R2R deal?
Most of the steps involved in R2R are similar to the BTL (buy to Let) process, but there are key differences that differentiate both. These differences are worth to be noted especially when you are hiring an agent to handle your rented property. Here is the process of R2R in detail;
- Find a R2R applicant for your property
R2R applicants are usually looking for good properties. So if you’re looking for one, you can look around for investors. You can invite them to have a good look around the property, and see if it fits their requirements. If they find a good price, they’re more likely to take up yours. Since you’ll be the homeowner, you’ll have the freedom to set prices. When you see that R2R is a continuous trend, you’ll know why it’s a good deal.
- Run Background Checks
You need a good tenant for any property that you’re renting out. In the same way, a good R2R investor is key to getting a good deal. Trust also goes a long way, and you need to create a list that you can check out as you talk to them. This plan will eliminate any hurdles along the way and ensure that the R2R deal goes smoothly.
- Pan out the intention of the R2R investor
Asking the right question is important. Hence, you have to ensure that either directly or indirectly you get to know the real intention behind the R2R investor’s purchase. Ask him how he aims to make the money and the vision for the future.
At last, make sure that your R2R deal is legally binding, and that there is no fraud involved. If all these points check out, you have a great deal at your hands.