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Once you found your property and you found the landlord, you had a lot to offer them, one of three types of deal. You’ve got fixed rate long term. This is your classic rental deal. It’s gonna be for a long period of time. You’re going to pay a deposit. You’re going to pay a monthly rental for the property. You’re going to then take that property out into the market and sublet it onto other people. The next one is property management, property management is where you charge a fee for the operation of the property to the landlord. And finally, you got the hybrid model. The hybrid model is a mix of the two. Essentially, what you’re gonna do is you’re going to charge the landlord a fee for maintaining and renting out the property. But you’re also going to guarantee them an income, which is usually on the order of 80 to 90 percent of what the typical rental income would be. There are various pros and cons to these different models. For a fixed rate, long term model, it’s easier to find properties that will take these kind of deals, easier to find landlords that will take these kind of deals. This is the kind of deals that landlords are typically looking for. Most landlords are looking for stability and long term rental. Long-Term Income. The other pro here is that it allows you to earn a spread. In other words, you know how much it is that you’re renting this property for over the period in which you’re renting it. And it’s now down to you. You have the opportunity to take that out to the market and find better deals and better rates in the market. Renting out a short term basis in high season where you get more money. The onus is really on you here to go out and. The difference?

For the protein measurement model, the proso, it’s easier to Skype incidents and the various things for one property is just as easy to really do it for, to protest free properties, et cetera. You can have much wider portfolio properties where you’re just a property management. Also, it’s recurring revenue. You’re getting fees from these landlords every single month. So you know that every month what the cash flow is going to be when it comes in through the door. Another pro here is that you have no initial investment. There’s no deposit to be paid. There’s no rent to be paid. Nothing like that. So it’s not particularly capital intensive for the hybrid model. The pros are. Cash flow arbitrage. Basically, if you can do a deal with a landlord where you say, OK, the money that I’m gonna guarantee you and pay you for the first 30 days, this property, I’m going to pay you 30 days net. And then what you can do is you go out into the market and get rental and get paid up front so that you’re always in front of the payment curve. In other words, you’re always going to be taking money in before you have to pay money out. Also, in this situation, there’s no deposit to be paid. All you’re doing is you’re taking a favourite landlord, but you’re also guaranteeing a certain amount of money goes in the other direction for rental.

They’re obviously cons also associated with these models for fixed rate, long term. The main con here is money. It’s capital intensive. You’re going to have to be paying out for a lot different things here and is going to be expensive to scale. You have to pay out for a deposit deposit on the property. You have to have that money available to put down. You’ve got regular monthly outgoings in terms of the rent, the pay on the property. You also probably have to invest in the furnishings and fittings of the property. When you first move in or when you first take responsibility for that property, oftentimes that would be an unfurnished property and you need to furnish it to the standards that you require. So scaling a fixed rate, long term model is capital intensive. The cons for the property management model. It could be harder to find properties that B or levels that be willing to take you on under this model. Most landlords are looking for the fixed rate, long term model, guaranteed income over the longer term. They want to be paying out money. They want to be receiving money. That said, property management is a fairly standard thing. You know, there are plenty of people in operations out there already doing this kind of thing. So you just have to dig a bit harder and negotiate a bit harder. There’s also less profit to be had here. The fees that you can charge for doing these various cleaning, maintenance, things like that on the property, a fairly standardised, fairly commodities, so you might be make this kind of deal up in volume. The cons for the hybrid model are kind of a mixture of the other two. The main one is that you don’t have to pay a deposit is still going to be capital intensive. You’re still going to have to pay out regular amounts of money to the landlord. You’re still going to have to invest in furnishing and things of that nature. But even those capital intensive, you have less bargaining power because you’re offering them less in return. So you don’t have quite the same leverage as you’ve got on the fixed rate long term.

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