Dan Jackson’s inspiring story of rent to rent success
And escaping his 9-5 within 12 months!

Hello, hello, hello!
We have got a brilliant one for you today.
We've got a special guest who's build up his rent to rent business, along co-living principles in just 18 months.

For any of you out there, who either own HMOs and are thinking of going into rent to rent or you're just starting out in property and thinking about rent to rent.
Wondering whether it works?
Wondering how do you do it?

This is a great show because it's going show you how it can really transform your life in a short period of time.

Now, as I said our guest today built up his co-living business with a fantastic brand within just 18 months.

What I love about him is his focus and his energy, but also the way that his whole business is focused on customer satisfaction, not just for the landlords and he’s going to tell you a bit more about how that works within his business.

He is a great guy, really likeable and good fun as well, very down to earth and I know that he's going to share with you the nuts and bolts of how it really worked from starting out and not knowing much about it to really creating a brand and a systemised business and dominating this space in his location.

So without further ado, Iet me welcome to the show, Rent 2 Rent Rockstar, Dan Jackson.

Stephanie: It's great to have you with us.

Dan: Thank you, Stephanie.

Stephanie: Brilliant. Well let's kick it off by asking you a bit about your background Dan.

Dan: OK. My background is in technology.

I worked for 20 years in banks from about 1996 when I started. I always had an interest in technology, built websites way back in the day before freeserve was actually a thing.

My career in banking progressed through the software development piece into business analysis and then project management.

But I've always been quite entrepreneurial. Under the hood I was always thinking about things I could try and do to build a business.

I have a family and it became very easy to just contract in banks essentially. It wasn't until two or three years ago when I started to look at things that I could do outside of banking basically.

I looked at a couple of things, but property was something that appealed to me for a number of reasons. I've got two kids and London where I live, I live in South West London, is expensive.

And my realisation is that they will probably end up renting. I was thinking ‘what could we do to make that better for them’? And that shaped the idea of going into property.

My first foray into the research area, I quickly realised that I couldn't afford to do what I thought I wanted to do in South West London, a flat is £600k there.

I spent six months looking at different markets in the UK. We went to Yorkshire, went to Bridlington in Yorkshire, which is about seven hours away from here to look at a development opportunity.

We spent many trips to Manchester, which is a HMO hot bed. We went to Kettering, London, Birmingham, all sorts of different places. And the driver for doing that was really that the price of entry for anything in London was just prohibitive.

Then I became aware of rent to rent. It felt like a dirty word. When I first heard of rent to rent I thought, "Oh no, that doesn’t sound righ." But I started to explore it and the key moment for me was I came across an advert on spareroom for a property for rent in near me in London.

The advert was insanely beautiful.

I mean, the rooms looked incredible. They had a video, the website was amazing. They were charging 20% more than the average market rates. So I phoned the guy up and I wanted to find out how he did it.

At this point I didn't phone him up in order to try and copy what he was doing, I phoned him up to find out how he did it. It became evident that he wasn't just buying, he did that as well, he was finding landlords that wanted more commercial arrangements and doing rent to rent deals with them.

So at that point I thought, "OK. This is exactly what I need to do."
And that was in November of 2016 when we first decided that we could build the business in London using rent to rent as our acquisition strategy.

Stephanie: Yeah. I really love that story. How you found it, fell into it. You've done a lot of due diligence.

Quite a lot of people are in your situation. Living in London, wanting to get into property and thinking it’s impossible to do it locally.

The great thing about rent to rent is the price of property doesn't come into it as you don't have to buy the properties to make money.

Many people struggle to decide which area to go for. You did quite a bit of research first about your area.

Can you tell us a bit more about how you decided upon which area in London to go for?

Dan: I'm very analytical because of my corporate background. I have suffered from analysis paralysis on many occasions.

I'm a spreadsheet guy, I've spent 20 years working in spreadsheets. My analysis around area was very detailed to the point that I had so much data. I've pretty much overdone the analysis. But I wanted to do the simple thing and build this with the resources I had.

The properties needed to be close to me. I live in South West London, SW16 and all our rent to rent properties right now are a maximum of 25 minutes drive away. I love South West London. I've lived here since the mid-90s. And it's a fantastic area for sharing. The Northern Line into town is just a great area.

It was quite ironic that it took six months to get to the realisation that actually I could build a business in my back garden! Lots of people were saying that. But I needed to really get to that decision my own way, I think.

Stephanie: So Dan, you did this massive analysis of the area. What are the key things that you think people should look for to work out if an area is gonna work for rent to rent?

Dan: That's a great question and I think to be honest, the points in London might be different for people if they're not in London. Although the fundamentals remain the same.

People who share need to be well connected. Therefore they need to be close to transportation links. In London, obviously everything is close to a transport link of some description. And things are rated according to ease of use. Buses would come after trains would come after tubes. So we need to be near tube stations. And the Northern Line again is the line that I've chosen. I live near it and most of the HMOs are near the Northern line.

Things that are less obvious but important, green space in London is premium. If you find somewhere near a park, people like that.

I think, from an HMO rent to rent or purchase perspective quality is super important.

I think the three things I was kind of look at, obviously you've got price, you've got quality and you've got location, and those three things form an iron triangle. If you get that right, then you will rent those rooms out. If you get that wrong your quality is below the price or the location doesn't matter, you won't get any inquiries of the rooms.

Stephanie: Fantastic. Those are really great tips for people there.

Now, we will come back because quality is more difficult or more challenging to achieve in a rent to rent where you would have more of a shoestring budget where either you're investing in someone else's property or you've negotiated the landlord to invest in that property and that's often, not going to be in terms of huge amounts that people might spend if they're renovating an HMO they own to rent out. We'll come back to how to achieve that quality on a budget.

For now we've got another topic that I know that people are extremely interested and that's how to source your rent to rent deal, especially if you're just starting.

This is something that people worry about most. And I know that you did have some challenges to overcome in this area. Let's go into that Dan.

Tell me about what your sourcing strategy was once you decided that rent to rent was definitely for you.

Dan: OK. This was back in January of last year and myself and Robin my partner had spent a lot of time doing this research. We decided round about Christmas time, this is what we're gonna do. We're gonna do rent to rent in South West London. We're gonna create a co-living company. I bought a book. I can't remember what it's called, but I bought a book that gave me some high level advice.

And I then told Robin that what we're gonna do is we were going to email all the agents, so we'd go into the rightmove and type in the criteria of the properties that we are looking for.

Stephanie: What criteria did you put into rightmove?

Dan: This is going back a little bit, but the criteria to start with was based on, three post codes area with natural 3 bed terrace properties, that we hoped had two reception rooms one of which we could then convert into a bedroom.

Having floor plans is super important when you're searching rightmove because you can discount anything that's got a nice big through lounge. If there's no way of creating that additional room, then the only way of making that property work from a rent to rent business is by getting a significant discount from the landlord. And in London that doesn't work generally, it can work but generally it doesn't work.

We were looking for 3 bed properties, 3 bed terraced houses, in three post codes that we then hope to have a floor plan and then drafted two or three standard responses that we could paste into rightmove, and then we searched and we sent emails. I was sending, I've got the numbers somewhere and we did discuss this earlier. I think in total over the course of two or three weeks, we sent hundreds of emails.

I'm not particularly confident speaking on the phone to someone I've never known before. So I felt uncomfortable the idea of phoning them up. My partner Robin, however, she just picks up the phone and talks to anyone. It's amazing. She was like, "OK, let's chase them all up." And I was, "No. I think we should wait for them to respond back, express some interest. We created that warm lead and then I will contact them." And she said, "OK. Well, we'll do both." I think the whole sourcing process to the first two deals was less than two weeks.

When we started in January 2017. It was less than two weeks to our first deal.

Stephanie: January last year guys. They only started January last year. I think that should really encourage people here who are on the edge about whether to go in too. Such fast results.

You started calling them down?

Dan: Yeah. I mean, one thing that I thought was really important was being really clear about what we were offering the agent, and therefore what we were offering the landlord.

I put a website up quite quickly. It was a very basic one before we came up with a name for the company. I was called DMH property, which is very corny and it's Dan, Molly, Harry [Dan’s children]. But it doesn't sound cool. It doesn't sound like the sort of company you'd want to rent a room from.

But we put that website up there, we created a brochure. And I think for me, those two things are really important because straight away I think we had some credibility with the agents.

I would recommend highly to do that to start and literally we used wordpress back then but I would recommend weebly now. Very cheap and it's drag and drop and it's a great way to create a website that gives you some presence. I'm proud of our website, I did that myself.

I think it's important that you have those two items [website and brochure].

A brochure was super important cause it was also a bit of an ice breaker when we're speaking to agents.

Stephanie: You printed that off?

Dan: No. It was, we created a pdf and just emailed it.

Yeah. I really like that. And I really love Dan's website as well. And the whole brand of the company is called Urban Shared.

Stephanie: Let's dig in with sourcing the properties. Did you find the calls worked better or the emails? What do you do now? What's your process?

Dan: Let's go back to the first two deals. The first few deals happened almost identically on the same day.

The process was email or phone call.
Some response from the agent.
Arrange a viewing.

And I think the other tip that I would definitely recommend was we never tried the whole subterfuge approach.
I said we're a professional company, we rent properties as a business and we then rent to our clients.
We didn't try and get viewings and then say, oh, by the way, this is a corporate lets.
I thought, no, let's just be honest, straight away, right up off the bat. Let's tell everybody what we do.
And we've told this one company that this is what we did and they were a little bit unsure as to whether they would like to go with this.
It is a small agent.

I think that people do say that small agents work and I can confirm the small agents work to start with much better than the branded agents that have got corporate departments that require two years of accounts.

So, definitely look for the smaller agents. But this agent was unsure and I think actually she possibly didn't know what we were doing and she was delivering a canned response around not dealing with corporates.
We sent her the brochure and about five minutes after we sent her the brochure, she phoned back up and said, "Actually, we've just got a house who the landlord of whom wants to use a company."
And we went to see it that day and it was a property that we still manage today.
And the landlord wanted the company because he'd had one before.

That was an interesting kind of brief, half an hour's worth of conversations because it went from pretty cold to, OK, we wouldn't be interested to yes.
That whole process was as a result of the calls that Robin made.
I think the thing about rent to rent that still surprises me now is I could sit here now with absolutely nothing in my pipeline and six o'clock have two seriously interested deals.
It really happens like that, you can have-

Stephanie: I'm sort of guessing that there's this one two punch, which is the call followed up by the brochure, which is a pdf you email over.

Amina has asked, "Dan, are your houses in the Article 4 areas or do you just avoid it?"

Dan: I don’t actively avoid, but none of them are in Article 4 areas. Although we've got three in Fulham that has introduced additional licensing. We could have a conversation about licensing if people are interested.

I wouldn't avoid an Article 4 area, there is demand for.
If there was demand for the product and that I knew how to be compliant.
In fact, I think I wouldn't be alone in probably assuming that it could be advantageous because to operate in an Article 4 area, you probably need to be more diligent, more focused and it may well remove some of the people that don't care.

Stephanie: You have experience of additional licensing coming in. What did you have to do to meet it? And how was that paid for between yourself and the owner?

Dan: The additional licensing came in October of last year [2017] and it's in Hammersmith and Fulham Council. They've also introduced selective licensing.
If you look at their websites, they have additional licensing at different numbers of tenants. So there's no two or three story criteria. It's simply number of tenants. And I can't remember off the top of my head but we have an HMO with three people that needs a license. I think it's, more than two unrelated, you need an additional license.

It feels as though some councils, and I hope no one is watching here is from the council. It feels like some councils are just using this to create some cash flow.

I'll tell you why. With Hammersmith and Fulham we went through the process. It was a quite a long drawn out process. It was all online, but it was a big job. We submitted all our documentation etc.
We paid the fee, which we paid and we haven't heard anything from them. That feels to me as though either they have a backlog or it was simply a way of creating some revenue because we haven't had an inspection or anything.

I'm interested to see how October turns out [this is October 2018 when HMO licences will be required for any house share with 5 or more unrelated people].

Stephanie: Yeah. The reason I thought those questions might be interesting is because lots of people will need to license their HMOs come October with the new regime that's coming in. So it's good to see that it's something that can be managed. On this occasion you paid it, but there might be other occasions where you negotiate that your property owner pays it.

I can't believe we're nearly halfway through.

We have had a question from Aki.
Whose name does is on the contract your company or the landlord’s? Your company or the landlord's?

Dan: Our company or my name.

Stephanie: OK great. Thank you for that Dan.

I think just to summarise then on the sourcing side of things, your tips for new people going into rent to rent, give it to us.

I think,
Be professional.
Have a website.
Have that brochure.
Have some scripts that you use when contacting agents and think about the benefits to the agents.

Make it all about the benefits rather than the features.

The benefit for the landlord, the benefit for an agent.
The biggest benefit as far as I can see is I can move really, really quickly on a deal.

If an agent really understood what we needed and they had one of those on that books, then we could have the deal done in a day so that that saves on the marketing costs, save them on the time that they would spend.

The benefit to the agent is that it's a hassle free. It's a hassle free sale for them.

I think the other things I would say is we documented everything that we did.
I knew how many calls we've made.
I knew how many emails we sent.
I knew where we sent them.
I knew when we sent the information what we sent, so I could look back and find out what worked and what didn't work.
I think treat it like a business and treat it like an operation that has a start, a middle and an end.

And I think sourcing then becomes a relatively straightforward task.

Stephanie: Yeah. And I think people would be surprised to hear you say that because that's the bit that people tend to say that they struggle with the most. That is encouraging.

Tell us all about your first deal? How you sourced it? The numbers? The challenges? And all the good stuff.

Dan: OK. We had two land at the same time, but the one that is probably more interesting was a 4-bed terrace house in Kirkham that came through an agent.

I'd met with one of the negotiators on another property.
It was clear that they were really interested in the business model.
A small agency and the owner of which actually become quite close friends and is our main source of deals.
One agent.

The first deal was as I said, it was a 4-bed in Kirkham and that was owned by the Church, mortgage free. Vicars lived in it since the mid 1920s or 30s.

It always been owned by the Church and we saw it on on a Saturday, along with two or three other operators in the area and these were names that I'd heard of before. Two or three bigger rent to rent businesses, one of which had over 50 properties in South West London.

I knew that if they were interested, that the numbers would work. It was just a question of getting the deal. I had put in an offer straight away, they told me that probably I need to up the price. So I up the price straight away. It was only £50 and it was still below market value. And then I think it probably took a week or two before they said that the Church wanted to go with us.

The numbers on that, bear in mind this is London!

We paid £3,450 a month to rent this property, which is a lot of money.
We rent out the to 6 people for around £800 per person depending.
It's quite cheap to run. We budget about £80 per tenant. There were 6 people that lived there and so around £350 to £400 pounds.
So those are the numbers on it.

Stephanie: That sounds like a good one Dan.

We got a question that does pertain to this. Let me just jump in and ask it.

So Josh has asked
”When dealing with the agent, do you always pay the asking rent for the property?”

I feel that if you're not dealing direct with the landlord. So in the example you gave us Dan, what was the property advertised for, and what rent did you secure it for?

Dan: Well, that's a good question. The property went for £3,500.

We put in quite a lot of offers up until this point and I'd read somewhere that we should be looking at offering 85% of the market rent as our offer.

And we could justify that by all the things that landlords don't consider when renting like voids, maintenance, all those sorts of things.

And 85% is justifiable. The downside is that no one will accept a deal 85% in London at the moment. It's still buoyant and families will still pay around our asking price. I was confronted with the reality that all my 85% offers weren't being accepted or weren't even being entertained. I then I had to adjust my expectations.

And in January of last year, if you were listening to some people that were training rent to rent as a business, they were saying you could make a £1,000 £1,200 £1,300. You might in some markets but in South West London you can’t. I quickly realised that if I need to do some business, I'd need to change my offers.

Stephanie: Tell us about what happened next. How did you feel? You've got it and how did it progress from there as far as the refurb and so on tenanting?

Dan: Looking back, it was myself and Robin that we did the refurb.

I can remember walking into this space thinking this is incredible.
This is our first one.
We didn't actually do that much.
We varnished the floors downstairs, really dark varnish, they looked amazing, and did some painting.

We had a new boiler installed that was at the cost of the landlord, and we installed an interlinked mains powered fire alarm system and fire doors and the 30 minutes plasterboard in the cellar.

It took six weeks to do that and during that time no one was living in it and it was costing £3,450.

I didn't really click that, that this didn't make a lot of sense.
Bearing in mind, we've got two at the same time.
The other one was less, but it was still a couple of grand.
So I was sitting there with two properties that we were doing up.

One we outsourced to a local builder, and that we put a toilet in, we painted from top to bottom, we took fireplaces out.
This on rent to rent deals.
We did lots of things that I would never do again.
Never ever, ever do again.

But at the time we did them cause we didn't know.

I think actually, we did know that you shouldn't pay, you should try and negotiate deposit free.
You should try and negotiate rent free period.

But quite honestly, we didn't have the experience or the sort of credibility to, for me to even entertain those conversations.

Back then I thought, "No, let's just get them."
And I remember talking to a friend of mine, he said, "No, you've got to pay to learn." And so, we paid to learn and we learned lots.

Dan: Yeah. Now, people watching today don't necessarily have to pay to learn because your experience is teaching them.

I think there some really, really good tips in that. Earlier on you said about having the website and when we're talking about the brochure, it's actually something that's on email, electronic and it's just been saved as a pdf and emailed to people.

So, you have to have your offer in writing is really what Dan means by that.

And then the second thing is obviously you have the rent free periods be careful about what sorts of refurbishment that you do, to look at the cost and so on. And I'm guessing you've got a spreadsheet to do your analysis of your deals and so on as well?

Dan: Yes. Yeah.

I did. Like I said, I've spent 20 years basically developing in excel, all sorts of different pricing models, etc.

Stephanie: Josh Senior has asked
”What is the average spend for both of you on the refurbs? I've seen some competition in my area and it looks like people are spending thousands and thousands doing them up.
Is this usually the case?”

OK. What, do you want to answer that Dan?

Dan: Yeah. OK. Again, that is another good question.
That was, I guess back in the day, back in January of last year.

My understanding was that you would need to spend on refurbs.
My understanding now is, I look to return the investment that we've put into the property within six to 12 months. Back then it was absolutely impossible for me to imagine that as being achievable.

But with that in mind, it's quite difficult when you're starting out. I'm not going to lie.
It's quite difficult to know how much to spend, what kind of property you might want to spend that on and bearing in mind it's not your property.
There's often a reticence to do that.
I don't think I really have an answer except it's really important to get that first deal.

And as long as you get a property that you're comfortable you can rent out, that you understand the competition.
You can use spareroom to ascertain supply and demand in various locations.
In London we always look for at least four times the number of people looking as there are rooms.

You might be comfortable, for example, returning your initial investment in two years. If you've got a three year deal, you might think that that works for you. For me back in the day that probably I would have probably have gone with a deal that did that.

Now, on our latest deal, our return on investment is immediate.
And this is a property that gorgeous, I will never live in the property like this. I guess you just evolve your thinking, what makes sense with experience.

Stephanie: You do evolve your model. Now, you asked for both of us Josh so I am gonna ask that question as well because a lot of you will know that we have spent a lot on refurbs in the past.

And there is risk in this model.
It's not for everyone.
How we structure our deals is typically 5 years.
And we saw a lot of opportunity when we first came here to take on properties that nobody else would take on.
One property we spent £12,000 and over 5 years, the return on the investment after subtracting the £12,000, we make £60,000. So we felt that, that was worthwhile. [UPDATE: The landlord has extended with us and we’re now contracted for a total of 8 years, over which time we’ll make a total of £72,000 after costs including refurb]

However, we wouldn't spend that much now.
There were certain things we were new to the area at that stage and so on, we didn’t know contractorss.
Things cost us more than they cost us now.

And again, we're better at negotiating with the property owners about things that they want to pay for.
The great thing about rent to rent is you can do it however you and the owner want to do it.

• To have owner pay

• To split the costs

• To do the refurb over a longer period - essentials now, other stuff later

• To pay for the refurb yourself and pay no rent until repaid

• To pay for the refurb yourself and have a reduction in rent which is bigger than refurb costs over contract period

So lots of different ways to do it. And we could probably have a whole hour just talking about the refurbs.

So if you are just starting out, you're doing your first deals, one of the most important things you do is to talk to somebody experienced who's already doing it.
Someone who has your best interest at heart.
A family or friend who's close to you, who's doing it, who's going to share this information with you, who you can bounce the ideas off so that you can learn without paying.

Or you can pay for that as with training or mentorship or coaching.
If you want to step up your progress and get expert help, ongoing support and a step by step system apply for our Rent 2 Rent Kickstarter Coaching Programme.

We have had another question for you Dan.
Sudi wants to know..
”When working with agents - email, call or visiting the agent's office, which do you think is the most effective?”

Dan: I would always start with an email, but that's, I guess because I'm perhaps slightly introverted.

I would never go into an agent unannounced, or phone up on cold call. It's just not something that I would do.

My partner would do both of the two things that I wouldn't do.

Whatever you're comfortable with, I think I'm much more structured and I think an email and then wait for a response.

If we've gotten no responses from our emails, I would then call, at least to have something to refer to. Did you receive my email?

But I think the most important thing is make sure that whoever, whichever method you use, one, you need to be prepared and two, you need to make sure you're talking to an influencer or the decision maker.

Stephanie: I want to get some of the meatiness because what you do is different to what a lot of other people do.

Tell us about the co-living concept and all about the service excellence for your customers who you call members and your app.

We're building a business that is looking to change the way people perceive renting in London.

The trend towards Generation Rent is such that by the middle of the next decade it is forecast that 75% of people in London will be renting. And among 22 - 35 year olds, 80% will be sharing.

So the market is growing for what we do and the idea of simply creating a series of one off properties that people rent, for me isn't that interesting. I like the idea of creating amazing places that people actually want to live. I accept that we've been brought up, certainly people in my generation have been brought up to think that owning is the way forward. I think that that's changing and therefore I think we've got an opportunity to make renting and sharing a really, really cool thing.

Co-living is essentially just a posh word for shared houses, but it talks about, we talk about community, we talk about people having sharing experiences.

Some of this sounds a bit American and a bit kind of cheesy, I'll acknowledge that. But I lived in a shared house when I was in my mid to late 20s and it could have been a much better experience. And things like splitting bills. I know that we all include bills in into our model but we're trying to introduce other things that develop the community into our model.

For example, we do social events. We are looking at providing discounts to local restaurants and shops. I'm not an expert in community. So one of the things that we will look to do when we grow is to find somebody that knows how to help us with this.

Online communities now may even be a way of creating that co-living feeling. I think there is a huge trend towards or there will be a huge trend towards this market. It would become more competitive. I think we need to develop our product in a more strategic way.

So, I love that now people are really creating beautiful HMOs. If you go on Facebook some of the rooms you see are amazing. We want to take that one step further. We want to say, well how well not just the room. What about the people? Can we make sure that someone who moves into this room wants to stay here? This person could be a customer for 10 years. I think about lifetime value of that particular customer.

We're developing ideas and we've created map that we're going to be rolling out to our customers that combines a few of the things that other apps currently do together with a few things that no one's doing. In an attempt to create some community and we're thinking of lots of different ways of making, I liked the idea of creating some software that puts tenants at the centre of the solution. At the moment, if you look at prop tech it’s all aimed at investors, property managers and landlords.

We put the tenant first cause they pay us.
How about we create something that's fantastic for them. So that's kind of what we're doing.

Stephanie: That's great. Thank you for that Dan.

We have got another question, Tracy says…
"I'm really excited about this, Stephanie. I'd like to know what the best tactics are for finding potential deals and how to first broach the subject of how to work with the landlord?"

We may have covered that a little bit. Well we have, but Dan, do you always get introduced by the agent or do you have some direct to landlords?

Dan: We have a couple of direct to landlord deals through my network, predominantly. When I started doing this people were saying, "Tell people what you do. Absolutely. Tell people what you do, don't sell anything, just tell them."

I've had quite a lot of people who I've known for years say, "I know someone that's got a house." Or, "I've got a couple of houses, are you interested?" So it really, really does work. Again, if they see that you're a professional and you know what you're doing and you have some passion for it, then you'll probably find that people who you didn't know have property could help.

Stephanie: Thank you Dan.

Justin asks
"When it comes to flexibility for the landlords in the contract, what do you allow? For example, if they need to sell or if they need to change their mortgage product to pull out equity?"

Dan: That's a good question.

We sign or have signed the dominantly 3 year deals with landlords. And what's really important to me is that the ecosystem of my business, we all know each other and I know my landlords, I know my agents and we talk to each other about things.

Nothing's happened yet that has changed the terms of any of these deals. But I would hope that if a landlord had a requirement to sell the property because it was a life changing event, that we could talk about it and work out a solution.

At the time, it's very, very hard to predict all the eventualities in it from a legal perspective, but actually most people are decent human beings and I would expect to be able to have a calm conversation with every single one of my landlords about the changing circumstances that might reflect, that might requires us to change the deal. That I think that would be my approach with everyone I was dealing with in the business.

Stephanie: We’ve got lots more questions for you.

Ernest has asked
"Dan, could you share what type of return on investment should we look for when starting?”

We were looking for, essentially to return upfront investment within 18 months to start with.

What would that be?
66% or something along those lines. We needed to have return within six to nine, six to 12 months and nine months is a good deal.

Stephanie: And we’ve previously talked about the need to ask the property owner to pay for the works. Often they will.

And if you are paying, here are a couple of ideas we’ve implemented.

So say a £6,000 refurb is needed to bring the property up to the standard that you feel that needs to be let out at, and you're on a five year deal.

You could then reduce the rent to the landlord by £100 pounds a month. That gives you an extra £6,000 over the term of the contract.

Or, and this is what I suggest, you could reduce the rent to the landlord by £150 per month, that give you an additional £9,000 over the term which is more than you actually paid out.

Another way is to agree with the landlord that you pay for the refurb and keep 100% of the guaranteed rent you would have paid to them for a specified period of time until your investment for the refurb is repaid. This reduces your risk as you’re repaid sooner.

Here’s a question from Raj
"Dan, how do you manage your properties? Do you have your own team or do you outsource?"

Dan: We have our own team at the moment. Our own team is not the most glamorous part of the business. It's me, it's my partner Robin. We have two handymen that we don't employ full time but work with us as a priority and we have a cleaning company, that I think is about six or seven cleaners and that's the team at the moment.

Stephanie: Nicky has asked
"Any systems nuggets Dan? What tools system adds the most value to your business? What could you simply not operate without?"

Dan: Excel.

Stephanie: Right. OK. Well, I kind of knew you're going to say that but you're an excel guru so I bet your spreadsheets look nothing like spreadsheets!

Dan: You’re right! . We know that we need to get some sort of a CRM. We tried to pipedrive for a while, which was good. I haven't actually found anything that I really love yet except that Excel for me really works.

Stephanie: Yeah. I think the online property management systems are fantastic when you do outsource because you can have a virtual assistant working in your business and using that system really easily.

Anyone can go in anytime, from anywhere and be totally up-to-date.

The one we recommend is Go Tenant
You get extra bonus units free when you use our link

The big challenge in the business that is putting a lot of people off from going into HMOs and rent to rent is voids.

So tell us about your top tips for keeping your properties full?

Dan: My top tip is to be completely all over it.

Robin is on spareroom all the time when we know that someone has handed in their notice and we’re very proactive.

We do viewings whenever we can. We do try and block them out. But if somebody can't do that at that time, we'll be flexible.

So I think you just need to really focus and be essentially all over it. And so far we've had, I think over the course of 18 months, we have 10 days of void.

I think as you get bigger, then you need to think about some other tactics and techniques. But I think being focused on, essentially making a decision not to have any and then focusing on what you can do to make sure they don't happen is the important thing.

Stephanie: So true Dan

We changed the way we give notice and that’s had a massive impact and the other thing is as you said Dan, excellence in service and excellence in marketing.

Question from Vince
"How do you manage going away for a week or two?"

Dan: Well, I think that the benefit of the use of technology enables me to manage the business from wherever. I've never not been away for two weeks since we started the business. But we went away for a weekend, last year and with those support phones, we use our own phones. Support phone is on from 9 to 5, and we have our maintenance people that can do many sort of emergency fixes in that period of time.

Obviously I wouldn't go away if there was a surge of people looking to hand their notice in.

Actually the last deal, this sounds cool, but it did happen. I did our last deal on the ski slopes in Italy. I think I've got quite lucky, but it's possible to run a property business, relatively remotely.

Stephanie: What I keep a forgetting anyway when I visit the website to see the rooms and the quality that Dan is offering, is that Dan started this business 18 months ago.

Of course as time goes on you will bring new people into the business and obviously that it gives you more freedom.

I just want to say thank you so much Dan Jackson for coming on the show and delivering such value to us all.

It's been great having you with us. Thank you so much to everyone who's watched live with us tonight and also all the comments and the love we've had. That's been great.

Dan do you want to add anything else before we go that you feel I haven't asked you?

I think that I would reiterate how important it is to feel very passionate about what you do whether it’s co-living, whether it's HMO or whether it's a shared house. I think it’s important to feel as though you can make a difference. I think it's not just about replacing an income. I think you need to feel passionate about it and want to make a change and keep going.

You can create a sustainable business from rent to rent and more importantly, it could lead to developments where it could lead to. It's a really great way of starting and it's very, very possible to take that and create something that you can be proud of and it can actually give you purpose.

Stephanie: Thanks again Dan. And if you're thinking of starting a rent to rent business, and you're just about in the beginning stage get our free Guide and Online Training. It’s a great way to start and see if this is for you.

See you soon
Stephanie & Nicky
xx

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