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Rent 2 Rent - An Overnight Success?

Francis Dolley who operates a 'Rent to Rent' operation around Bristol comments on recent criticism of the business model

Eddie Cantor was a Broadway star of the 1930's and is the first person accredited with saying "It takes 20 years to become an overnight success". And I can't help but think of Eddie every time I hear the phrase 'New Craze' or 'Get Rich Quick' being applied to Rent 2 Rent (R2R), as it too has been around for at least 20 years. What has recently happened is that instead of hanging around at the back of the theatre, it has been shoved up on the stage for all to see, and scrutinise. If you need any further convincing as to the longevity of R2R, take a look at Northwood's website - their model is R2R/Guaranteed Rent - they were founded in 1995 and now have over 70 branches nationwide. Talking to many investors, landlords, estate and letting agents over the last few years I would estimate this is the mere tip of the iceberg, with most people going about it very quietly and not publicising the fact for fear of criticism.

I have read many anti R2R articles and they invariably bring up the same two high profile cases - one of those, Ms Chimuka, was a criminal who chose R2R as the vehicle to commit her crimes, for which she is now paying for at her majesty's leisure.  The other person has openly said that he made some awful business decisions which resulted in his company becoming one of 15,000 UK business insolvencies last year. But was their downfall really to do with the R2R strategy? One is often cited as being 'another R2R rogue', but these articles fail to list any others? To put it in perspective, last year more than 77 high street estate and letting agents also went bust but I wonder how many of them cleared their debts or did they just change their trading entity and start again as so often happens?  

I run R2R workshops with my daughter Emily showing other people how we set up and operate our R2R properties in Bristol and we are passionate about what we do. We often hear back from guys who have done our training, when they explain the R2R strategy to letting agents are asked if they would like to JV with them. Agents are often pleasantly surprised to realise that we are not all bloodsucking charlatans out to make a fast buck, but actually want to create a good solid sustainable business and are working very hard at doing so.

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