141: Tracey Stewart has built two great property businesses on the back of a rent-to-rent strategy which has given her freedom from the stresses of corporate life

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Tracey StewartTracey is a property investor, manager, landlord and mentor who has been building her portfolio since 2007.

She started investing in single lets whilst working full time as a project manager, a job that took her all over Europe and the long hours and stress of balancing this with her property investments eventually led to burnout and the diagnosis of a chronic illness.

She made the decision that property was going to replace all of her income and in 2013 started her first business, Midlands Lets – a rent-to-rent style HMO business. She now also runs Right Housemate, another specialist HMO letting agency based in Leicester.

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Investing Strategies

Tracey has a plan to start buying some property to convert into HMOs, but at the moment she’s doing phenomenally well simply controlling the properties on a rent-to-rent basis.

Except for one property, the whole portfolio has been sourced through letting agents where Tracey agrees to rent the property from the landlord and then sub-lets the individual bedrooms on individual tenancy agreements. She does some work to them where necessary, but rarely spends more than £2,000 before being able to rent it out as an HMO.

The relationships she’s built with letting agents have been a huge factor in her success as she’s now at the stage where the agents know exactly what she’s looking for and only send her details of properties that will meet her criteria. Not only that, but she’s now at the stage where the agents trust her so much that she no longer needs to pay deposits on the properties she’s renting either.

This is a such a low cost entry point into property investing and Tracey has built a truly inspiring business on the back of it.

Biggest Success

In October of 2015, Tracey’s company Right Housemate took on a 5 bedroom rectory next door to the local church. The demand for this size of rental property from single family tenants was slow, so one of her well trained agents gave her a call and it’s turned out to be an absolute winner.

Most rooms have been filled since they took on the property, and those that have come back on the market have typically been re-let within 24 hours.

The rent to the landlord is £950, and the 5 bedrooms rent individually for an average of £400 per month. Running costs are pretty low – utilities, council tax, broadband etc, giving a healthy cash flow on this deal of over £700 per month!

Biggest Difficulty

One of Tracey’s single lets (the third one she purchased) was bought before she had any education on what made a good investment. It was purchased with her business partner, and was next to an RAF base that was set for expansion but in the 10 years she’s owned it there hasn’t been a single enquiry from anyone at the base!

Looking back on it, she knows she paid too much for the property as a result of not doing enough due diligence. Up until a year ago she was having to top up the mortgage payments every month as the rent didn’t cover this, and to make matters worse it’s still in negative equity.

360 Degree Images

During the show, Tracey mentions her Ricoh Theta S 360 camera as her favourite tool, allowing her to take amazing 360 degree images of her HMO rooms. I agree they look fantastic and really stand out compared to a static 2D picture of one corner of the room.

This is the camera she uses:

Ricoh Theta S Camera
Check out an example 360 Room Image from one of Tracey’s properties here.

What’s Your Favourite Book?

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Go For No – Richard Fenton & Andrea Waltz

Tracey Stewart’s Links & Resources

LinkedIn – Connect with Tracey on LinkedIn
Email Tracey Stewart – Got a question or looking for some advice? Get in touch with Tracey here.

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