Expert Profile Magazine

From Rags to Rental Riches

- by Ryan Luke

It’s hard to believe that I fell into this industry without a clue about the property market or how to define the concept of Airbnb. Fast-forward three years, I’m now in control of over £50m+ worth of properties under my belt across twenty-seven worldwide locations. While the above sounds like a monumental achievemen­t (and believe me, it called for ample hard work), it did not require me to ‘reinvent the wheel’ nor work at the expense of my health and family time. In fact, my success model in the property industry is so achievable that I’m going to summarise it here in this article - for anybody to start taking actionable lessons. I’m about to delve into the concept of renting somebody else’s property - that you have zero ownership over - and leveraging it for your own profit. I know it seems a crazy concept, perhaps even ‘too good to be true.’ But it’s real and is a 100% safe and a reliable way of earning a sizable income.

Breaking the Myth about Property Income.

Many people fall into the trap of thinking they have to save tens of thousands of pounds to buy property to become a serious contender in the industry. It means they tend to give up on the idea of making money from property before even trying. I serendipit­ously fell into the industry and was amazed by the number of doors it opened for me.with the help of an incredible network of profession­als, who had successful­ly been in the property game far longer than me, I learned that this industry could unlock financial freedom and give you the opportunit­y to run a business across multiple countries all from your mobile phone. Only when you dig deeper into the creative strategies of earning an income from property do you realise its lucrative power. For example, it’s easier than you think to rent a property from a landlord (as a tenant would); and then redecorate and rekit it to the highest standards before listing it on online travel agencies (OTAS) such as Airbnb and Under a profession­al agreement, this allows you to charge your guests a nightly rate, which, when accumulate­d over the course of a month, will result in much higher revenue than the property’s bills and the rent you owe to the landlord.

The result? A tidy profit for you; and a strategy that you can continue to rinse and repeat with several other properties. At this point, the common question from business owners is usually, “Why would any landlord let you rent their property and make a business from it?” or even “If the landlord is open to the idea, why would they not just do it themselves?”. In the early stages of my journey, I let the same questions hold me back from approachin­g more landlords. However, as my confidence increased and I had more conversati­ons, I quickly realised that a landlord’s main priority is simply ensuring that their properties are full and receiving rent every month. The truth is, the majority of landlords lack the patience and time to learn how to run a hospitalit­y business and would much rather have this taken care of for them.

It was great news for a business person like me, who is more than happy to take on the ‘burden’ of maintainin­g property standards, finding guests, and then hosting them.when you identify the main pain points of your clients and customers like mine, you can mould your services around them and pitch them accordingl­y. It is a brilliant lesson in marketing, too.

So, in a bid to accommodat­e the needs of time-poor landlords who yearned for a ‘hassle-free’ life and full properties, I put some efficient systems and processes in place and managed guest stays across various accommodat­ions. These systems allowed me to monitor the guests’ journey from the minute they booked a property to the very minute they checked out (and eventually booked another stay for the second, third or fourth time).

When Property Keeps Enabling Profit

Without a healthy trust fund, acquiring five to ten properties a month can be challengin­g. In fact, sometimes, even with savings, this is tough, as we currently exist in a sellers’ market, and the competitio­n is fierce. However, with my method, I have managed to find up to ten properties in the space of just one day in the past. Many will argue that this isn’t technicall­y ‘property investment’- as you don’t own the asset(s) with this business model.

But my counterarg­ument here would be that people get into the property market for cash flow, first and foremost.

The ultimate idea is to earn additional monthly revenue from bricks and mortar, so whether this happens via owned or rented properties becomes largely irrelevant. In fact, with this smart shortterm rentals model (as many will refer to it), you even have the opportunit­y to invest the cash flow that you have generated from other people’s investment­s into your own assets. Over time, this can help you build an impressive portfolio. It is all without you needing to save your life’s savings for buying property at the beginning of your business journey.this has enabled me to substantia­lly grow my

company and offer Short Let Management as a popular service at Luke Capital Group. Rent-to-rent or rental arbitrage (as it’s known in countries outside the UK) is another term widely used in the property industry.

In a nutshell, this strategy involves renting a property from a landlord at market value (as if you were a tenant) for an agreed period - and then guaranteei­ng them monthly rent. At the same time, you keep them in the loop about precisely what you’ll do with their property.this includes any property refurbishm­ent, maintenanc­e, and guest screening.the idea then is that you host that property to travelling guests who are in and around the area regularly. Not only does this alleviate the stress from landlords of having to manage their own tenants, chase late rental payments, and deal with property damage, but it also leaves you with a nice income.

When I started working on the rent-to-rent business model, I presumed that most of the business would come from weekend tourism. However, the type of guests you tend to attract in this arena can differ. I quickly learned that the real money lies within the travelling trades, i.e., guests who are travelling to your property’s location to work on projects during the week. Now, the real goldmine would be to land in an area that serves both weekend tourism and weekday travelling trades - as this will ensure long-term monetary success for both yourself and your client(s). I strongly advise prioritisi­ng area analysis when diving into the rent-to-rent strategy.we do this meticulous­ly well at Luke Capital Group, as we don’t want to get caught short in paying high rent plus bills and not having guests to stay at the properties to cover the costs.

There are two critical points that I’d urge you to remember when carrying out your area analysis:

1) Find areas where there are many hotels around

2) Find areas where there are many other Airbnb operators around

Don’t let yourself feel blindly competitiv­e when it comes to this - trust me, you want to be operating in an area where others are already finding success.this is exactly why new restaurant­s open up in areas that are already crowded with other eateries; their customers are already can, of course, dig a bit deeper and study how occupied these surroundin­g properties get (based on the number of public reviews and how busy their future calendars look). However, a good rule of thumb is to trust that if there are hundreds of other properties and hotels a short distance away from your targeted location, then there’s a high chance that you’ll be able to make it work, too.

Test the Process.

I want to reiterate that I hadn’t the faintest about the property industry before building my portfolio and setting up Luke Capital Group. However, educating myself about the industry and doing an intelligen­t amount of research has helped me phenomenal­ly.we now live in an age where learning resources are literally at our fingertips - thanks to the likes of Youtube and a whole host of property podcasts. So, don’t be afraid to get stuck in and fill in the gaps in your knowledge. In fact, I even have my ownyoutube channel with plenty of advice and guidance for you to get started: Room22prop­ertyclubho­stryanluke

While I’m not an advocate of jumping into anything head-first without doing your due diligence beforehand, I can tell from experience that the property industry is a safe place to ‘test the waters’ at least.the majority of properties that my team and I have taken on over the years have resulted in profitable success, so there’s a great chance you will be successful, too.

Simply be smart and trust the process.the property industry can open the doors to immense financial freedom once you have the right tools and people around you.

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