What Is Rent-to-Rent and How Does It Work?

The rent-to-rent model is a property investment strategy where an individual or company leases a property from a landlord and then rents it out to tenants—usually on a room-by-room basis—to generate a profit. It’s often seen as a low-barrier way for aspiring investors to enter the property market without needing large capital upfront to purchase property.

How Does It Work?

At its core, rent-to-rent is about taking control of a property without owning it. Here’s how it typically works:

A property investor or management company enters into a long-term lease agreement with a landlord. This contract gives them control over the property while the landlord retains ownership.

The investor agrees to pay the landlord a guaranteed monthly rent, regardless of whether the property is occupied.

The investor refurbishes or reconfigures the property (if needed) to suit a target market, such as young professionals or students.

The rooms are then rented out individually to tenants at a higher total monthly income than what’s paid to the landlord.

The investor manages the tenants, maintenance, bills, and legal compliance.