The Property Unleashed Podcast

Rethink Rent-to-Rent

• Mark Fitzgerald • Episode 348

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Most rent-to-rent failures start before the contract is signed—by chasing the wrong type of property with the wrong plan. We pull back the curtain on how to find cash flow quickly without sinking money into someone else’s asset, and why converting buy-to-lets into HMOs is a fast road to delays, compliance headaches, and long paybacks. Instead, we map out a smarter path: target ready, licensed HMOs and pre-existing serviced accommodation units where your operational edge—not a heavy refurb—creates the margin.

We dig into the practical rules that protect your downside: a six-month maximum payback target, strict quality filters, and area due diligence that matches tenant or guest profiles to the streets you’re actually renting. You’ll hear a candid case study of a great house in the wrong area, how we repositioned it by marketing to local factory teams, why a break clause saved the upside, and what made us exit on friendly terms. We get specific about SA: when furniture spend makes sense, how to inherit setups from burned-out owners, and the exact levers—listings, photos, pricing, and ads—that turn underperforming calendars into steady bookings.

If you’ve been told to “add value” with refurb, we’ll show you a better lever: time-to-cash. Modern HMOs demand higher standards; dated four-bed layouts with repurposed lounges won’t cut it. With a few clear underwriting rules, a consistent follow-up pipeline, and the right stock, rent-to-rent becomes a lean, resilient cash-flow engine. Subscribe for more step-by-step strategies on HMOs, serviced accommodation, and winning deals without gambling your upfront capital. If this helped, share it with a friend and leave a quick review to tell us your biggest rent-to-rent hurdle.

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SPEAKER_00:

Looking at doing rent to rent? Stop thinking about it this way. In today's episode, we're gonna go through the wrong way to do rent-to-rent as a strategy so that you don't make the mistakes that I'm seeing far too many people out there making. So, what mistakes are they making? Well, fundamentally, they're looking for buy-to-let properties when they're trying to do HMOs. Why? Because they've been told to get a buy-to-let property, convert it into an HMO, and you get paid the uplift. That is the wrong way to go about it, particularly now. You want to, if you're looking at doing HMOs, go for pre-existing HMOs that are already set up, already licensed. You haven't got to put all of that money and expense into it. Now, if you are looking at buy-to-let properties, and a lot of people are for serviced accommodation, holiday lets, Airbnb, then yes, that is the right way to go about things. But don't look at a buy-to-let if you're going through and doing HMOs. Also, make sure that you're not looking for run-down, rubbish properties. You want to be looking for properties that are A, in a decent condition, B are in a very nice condition. Why? Because that's another cost that you do not have to pay. This is something I really do go through and I really make it quite strict with my students. If the deal stacks up and you can get it at a great price and you have got to put some money into it, fair enough. But a lot of the times we get into rent to rent for cash flow, month-on-month cash flow. If you're spending a lot of money on somebody else's property, then that's not good business. Oh, it's okay, Mark. After 12 months, I'll have paid myself back, and then I've got, if you're on a five-year agreement, another four years of profit. Don't look at it that way. You want to be getting profit as quick as you can. I would not do a deal that I had to put more than six months worth of profit into. Why? Because you're working for nothing and you'll soon get tired of that, and that's what a lot of people make the mistake of. 12 months is a long time to not be getting paid. So make sure that you're looking for properties in a good condition. HMOs, I always look for stuff that A, the landlord will put some money into, or B, I might have to spend or just give it a lick of paint or something like that. The most I've ever spent on an HMO is 900 pounds for a couple of carpets and some painting. Serviced accommodation, you probably will spend a few thousand pounds on that because you'll have to furnish it in most cases. The furniture probably, even if it has part furniture, won't be up to much. You might get lucky. Or look for pre-existing serviced accommodation units where the owner is just getting fed up with doing it themselves, and you could do a rent-to-rent with them on that. That is something now that I'm showing people in my trainings exactly how to do and how to pinpoint and how to get out there because there's no cost for you. It's already set up. You just take it on and you start running it as a service to accommodation, which is already generating money. Now, sometimes it's not generating money, and that's why they've got a problem. In which case, then we'll be taking over running our own ads on Airbnb and Booking.com so we can take it on as the property professionals that we are. Again, people are looking for tired properties when it comes to rent-to-rent. Stop doing that. Start looking for better quality properties. Make sure that they're in good areas. Make sure that they're going to cash flow and you can get the right people to stay in there. So another one is they've just found a deal. It's in an area, it's not the best area, and it doesn't have to be the best area. A lot of properties where I look at, and a lot of properties that we have in my businesses aren't particularly in areas that I would maybe live myself, but they are safe areas. They are areas where people want to walk down the street. Now I did do a deal on a rent-to-rent where people didn't actually really want to walk down the street. And that was a mistake on my part, but I did manage to get that property to work. What I had was a five-bed property. It was in great condition. It was just in the wrong area. I didn't do my due diligence on that property. So when I actually went to let the property out, I was struggling because people knew that that was a bad area. But what I did know was there was a lot of factories in that area, and they had a lot of Eastern European people working in those factories. So I started to market out to those guys and girls that wanted to stay there as a group, and they did. So for two and a half years, I had a group of Eastern European people who looked after the property that lived there as their own little community, and it worked very, very well. Now that worked out okay for me, but it was a serious lesson in do your due diligence. Know that your areas are the right areas and they're going to suit the type of people that you want to come and stay at your property or live in your property. I also did have a break clause, so I could have just issued the break clause and given the property back. In the end, I did because after two and a half years, they decided that, well, a majority of them decided that they wanted to go back home, and a couple of the other people decided to move on. So I issued the break clause, gave the property back to the landlord in a better condition than I received it, and we moved on. We parted as friends, which is good for the landlord because he was interested in selling anyway. He actually did offer it to me first, could have been potentially a purchase lease option, but it was in a bad area. So there's a lot I could have done with that property, but because it wasn't in the right area, it wasn't the right opportunity to do, I walked away from it. And you should do exactly the same when it comes to your investing as well. Don't get so hung up. I'm speaking to this landlord, they're up for it. If the problem is that A, the property is too run down, it's going to cost too much, and the landlords aren't willing to put the money into it, walk away. Or if they want too much money, which could be the other thing as well. Remember, no doesn't mean no, it just means not now. So potentially an opportunity that you're trying to go through right here, right now, might work in the future. So follow up with people. Always make sure that you've got a massive follow-up system and you are consistent and persistent in your follow-up. Make sure that you're not doing any deals, that you're not going to start making a profit after six months. If it's going to take 12 months, weigh it up. It might not work for you. It might, but it might not work for you. But don't be looking for the old four-bed properties, two reception rooms, stick a bed in a reception room. Trust me, those days are gone. You'll struggle to let that now because people are expecting a better quality HMO when they move into it. So why not go for the good quality HMOs now, knowing that you can let it, knowing that you can help the landlord or the agents that you're trying to work with, and of course, making sure that everything is set up in a win-win environment. So when you are doing rent-to-rent, make sure that predominantly, unless you're doing social housing, I'm not going to talk about that here, but that that is the only caveat to this. You're doing HMOs, houses of multiple occupation, where you let the rooms out on a room-by-room basis and they have a communal kitchen and potentially a communal space. Or you're doing holiday lets, Airbnb, Booking.com, service accommodation, short-term rentals, where you're letting it out on a night-by-night basis. Why? Because they're the best cash-flowing strategies to use with rent to rent. If you want to learn more about service accommodation, HMOs, rent to rent, check out education to action. We give you all the tools, we give you all the training, show you exactly how to do this in our step-by-step training and blueprints, and then we help you on an ongoing basis take the action, which is why it's called education to action. Too many people have got the education, they're just not taking the action. We help our community members do that, and we're seeing some amazing results. So you can come and jump in there, try us out for a pound, just one pound, and we'll help you. There's some free tools and resources as well, which won't cost you anything if you just want to jump in on the website and grab those as well. But make sure that you're not doing the old ways when it comes to rent to rent. Make sure that you're up with the times, that you're doing good deals with good properties, with good people, and you will be on to an absolute winner. Hope you've enjoyed this episode. I've really enjoyed having you join me today, and I look forward to you joining me in the next episode. Take care and bye for now.