I have decided to focus my next 6 months on the strategy that is called Rent-2-Rent (R2R). In simple terms, you rent a property from a landlord and you then sublet it at a higher rate than what you are paying to the landlord. A rate high enough for you to be left with a meaningful profit after you have covered all other cost associated to controlling the property such as Content Insurance, Rent Protection - optional-  and so on.

The benefits of this strategy?
 You are using the astute principle of LEVERAGE, a.k.a 'Own Nothing, Control Everything'.
There is a quote that has been circulating recently on social media: 'AirBnB the larger accommodation website owns no room'. It is on the same principle - you don't need to own it to make money from it.
Another Benefit is that it requires very little initial capital investment. It can be a few £100s to I would say maximum £5,000 if you are redecorating the property. My personal rule is that it is someone else's property so I do not want to be investing a lot of money in it. The sector's rule of thumb is to recoup all your investment within 12months; mine, 7 months.
Third advantage, is that as a newbie - which I clearly am - you get to have the same property management and dealings experiences as any landlord. From marketing your property to referencing tenants, to talking to builders and tradesmen to dealing with maintenance issues and establishing systems to maximise your time and minimise your labour to say the least
4Fourth advantage is that you can get into property investment through Rent2Rent with a poor, very poor credit, and start generating some cash flow within a few weeks if you know what you are doing.
Lastly, it cash-flows just as well and sometime better than properties owned by any landlord.

What is not so good about it?
Well, it is not yours so there comes a time where you need to give the property back to the owner. If you are looking to generate a passive income i.e. an income where money flows into your bank account with you doing virtually nothing (apart from enjoying that nice glass of wine on the beach at sunset), this is not a long term strategy because you need to keep finding properties to rent or keep working at your relationship with your landlord so that they extend your agreement. Unless you have an 'option' to buy it; but this a topic for another post
Another down-side is that typically to maximise your profit you will need to rent the property on a room-by-room basis (not always, but most of the time). Houses of Multiple Occupancy (HMOs) as they are called are very labour-intensive and the rules and regulations about it are not simple. You need to know them and make sure you abide by them, as it is about people's safety after all, not something you want to be taking risks on.
Finally a significant downside is your own and others' perspective of you in the Property world. There is a certain pride and joy in owning properties, being a Landlord with capital 'L'. And well, you are not really that, are you? You are 'only' a rent-2-renter. Never mind that you might be cash-flowing anything between £300 - £10,000 net per month, the status is not quite the same.

My wrap-up thoughts on this is I shall swallow my pride and keep my heads down working hard at building my Rent2Rent portfolio until it is generating the Cash-flow I am aiming for, and I have learnt the ropes without having invested dozens of thousands and taken life-long mortgage commitment in potential mistakes. By the way, mistakes are great if you learn from them and manage to recover from them. Once I have the cash-flow nicely flowing then I will focus on property ownership.

If you want to know more about Rent2Rent, just leave a comment and I will be posting more bite-size posts about the various aspects of it.

Have you previously heard of Rent2Rent? Do you do it? Tempted? Share your thoughts below!

Until next time, your host for property & liberty - Sylvie