If you have been reading Property & Home with Martin Roberts for long enough, you will know that despite the ups and downs of the property market, there are always persuasive reasons to invest.
Whether you want to buy at auction, renovate and ‘flip’ a property for a quick profit, live in it yourself as a long-term investment, or build a portfolio of buy-to-rent properties, there’s always a sound argument for putting your money into property.
But, it can be a bumpy ride, with fluctuations in the prices of housing, disruption to the mortgage market and change in tax laws making it difficult to make long-term decisions. What if you want to have a predictable income without having to play the game of constantly moving your money around and looking for the next snake or ladder in the property market board game?
Increasingly, investors are looking to two solutions. One is to invest in the international market, where national fluctuations are less of a problem; the other is to look into the ‘R2R’, or ‘Rent-to-Rent’ market, rather than being committed to a ‘Buy to Rent’ investment.
Returns
So how does it work? Typically, with R2R, you will invest your money, perhaps £25,000, in a management company with an international portfolio of rental properties. Over a contract period of perhaps five years, the company will utilize your capital to acquire properties of optimal value and manage them efficiently through various rental models, in collaboration with trusted local management companies. These properties tend to be upmarket rentals, often serviced accommodation (SA) which can maintain a high level of occupancy at all times of the year.
If you have the money to invest in property but perhaps not the time or inclination to manage it, this hands-off approach may work well for you. The management company eliminates the time and fuss involved in managing a property portfolio, so you don’t have to deal with things like guest relations, cleaning and maintenance, while guaranteeing a defined monthly return on your investment. The key of course is access to prime properties, so do make sure when you look into R2R management that the company has a good track record of testimonials. ■
This feature was originally published in the Autumn/Winter 2023 issue of Property and Home with Martin Roberts. Read more here.
See also: UK Rents Will Not Peak Until 2025
