Rent To Rent Vs Back-To-Back Leasing

Rent-to-rent is “dead” gets repeated so often it starts to sound like fact. We don’t buy it. Mark Fitzgerald breaks down what’s actually changing in the UK property market, why people are suddenly hyping back-to-back leasing, and what the Renters Rights Act chatter is really doing to investor confidence. If you’ve been weighing rent-to-rent, serviced accommodation, Airbnb, or HMOs, this conversation helps you separate strategy from noise and choose the right tool for the deal in front of you. 

We get specific about how back-to-back leasing works when the end tenant is a provider or charity connected to temporary accommodation, social housing, or supported living. Mark explains the “sit in the middle” model, why many providers want the landlord signing the lease, and how transparency can make or break the relationship. You’ll also hear why forcing a deal after you’ve found a random property is a common trap, and why a provider-first approach often creates faster, cleaner matches.  

The practical core is risk control. We talk provider due diligence, checking funding sources, looking for a solid operating history, and understanding what an FRI lease should cover so landlords are protected. We also touch on watertight lease agreements, break clauses, and the often-missed step of confirming mortgage conditions so nobody ends up in breach. The big takeaway: back-to-back leasing can be profitable, but only when you run it like a professional management business and keep the end user’s needs in view.  

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Transcript

The Big Question Up Front

SPEAKER_00 0:00

What's better, rent to rent or back to back leasing? I'll talk you through it right now. Hello and welcome to the Property Unleashed Podcast with me, your host, Mark Fitzgerald. So let's jump straight into it today, shall we? Because I hear a hot topic, particularly now with the new Renters Right Act and all of those great things coming in, that rent to rent is dead. But back-to-back leasing is the future. Well, back-to-back leasing's been around a long, long time. So let me, before I jump into all of this, make sure that we all understand what back-to-back leasing is and what rent-to-rent is. Now, fundamentally, rent-to-rent is where you take on a landlord's property, you pay them a set guaranteed rent each and every month, you take care of the minor maintenance issues of the properties, the utilities in the bills, you basically treat the property as if it's your own. And of course, over that time, this strategy works brilliantly with serviced accommodation, Airbnb properties, and HMOs. Why? Because you can get better rates using a property as short-term rental, Airbnb, and of course, you get more profits from an HMO where people rent the room out on an individual basis. Back-to-back leasing is very much like a rent-to-rent, but in this case, you would find a landlord, an owner of a property who is happy to lease that property for you, or to you, should I say, for a set amount of time. Very much like a rent-to-rent. On a rent-to-rent, I always try and do those for five years. So you lock that agreement in and have that control of that property for five years. Very similar again as to a back-to-back. Now, back-to-back is where you have a landlord with a property, you sit in the middle, so you talk to the landlord of that property, you say to them, I'm going to put a provider or a charity into that property. And then you basically find a provider and a charity to lease that property from you and the landlord over a set amount of time. Now, while back-to-back leasing can be very, very profitable and can be very good, there are a lot of things that you need to be aware of, which I'll go through in this podcast episode with you. The fact of the matter is, whilst that sounds absolutely amazing, so you do a deal with a landlord, so you could go up to a landlord, say I work with providers and charities, we're looking for these types of properties in the areas. Could be bungalows, could be terraced houses, could be, could be HMOs, could be flats, could be all sorts of different things. Providers all need different stock for their clients, as they say. So you go, you find a landlord who's open to putting a provider in, which is great stuff to hear. Then you have a provider. So this is a charity. This could be for temporary accommodation, it could be social housing, it could be supported living. You then negotiate the property with the provider. The provider says they're happy to take it on. You can sign a lease, but it's best to get the owner of the property to sign the lease with the provider, and you sit in the middle. So you agree a set rent with the owner of the property, a bit like a rent-to-rent. And then if the provider is going to pay a bit more rent, you basically they pay you the rent, you pay the landlord their rent, and you get the bit that's in the middle. So you don't have to do a massive amount of work for your profit. What is not to like? I hear you thinking, wow, that's the future mark. Now, there is a lot of stuff that we need to make sure that we get right with that. It's not as simple as just getting hold of a property, giving it to a provider, and then letting the money roll in. You really want to be setting yourself up as a management company, if this is the case. So for me, it's very much been that I've always set myself up as a management company. You see, the back-to-back model only really works if you can find the right property for the right provider. Okay, you need to structure the deals in the best manner, realistically, for the landlord and the provider. And then if you can make some money out of it, happy days. Now I have a company called Social Spaces that actually works with a lot of different providers, landlords, and investors. We don't predominantly do back-to-back leasing. We actually help investors and landlords to put providers into their properties, but we put the two together, we do charge the landlords a sourcing fee, which is normally one month's rent or six weeks' worth of rent, to put the two together, but then we leave them to it. If you're doing back-to-back leasing, you need to be very careful. Number one is a lot of providers don't want to do a back-to-back, they don't want anybody in the middle of the deal. The other one is they need the landlord in most cases, in nearly all cases, to be the one that signs the lease. So, of course, you've got to be up front, you've got to be transparent with the owner of the property about what you're looking at doing with the property, get into a good relationship with the owner. And if the owner's happy for you to take per se a commission from a back-to-back lease to stay in the middle, and basically, if there's a problem with the provider and the property, they'll talk to you. You can then speak to the owner of the property about that, then it's a great place to be. But I see far too many people just trying to force a back-to-back lease because they found a provider, or worse, they've just found a landlord and a property that's open to it. And now, why do I say that's worse? Because a lot of the time you can go out there and find a property, and then you're thinking, I need to find a provider. Now, providers can be in a lot of areas very, very difficult now to get into bed with, so to speak, because there's a lot of people that have tried to do so and they've been let down by a lot of people. Now, there's a lot of rent-to-renters, there's a lot of back-to-backers, and there's a lot of providers out there that aren't always what they say they're going to be, that aren't always that professional, they don't always know what they're doing. So it's very, very important that you do your due diligence on providers that you're looking at working with, that you make sure that they've got the proper proper funding, either government funding or council-led funding, that they've been operating, I would say, for at least three years. And also that they are going to do what they say they're going to do with regards to an FRI lease. Now, an FRI lease is a fully insured lease, okay? Which means a bit like a rent-to-rent, they will cover the minor maintenance issues, they will fix things if they're broken, they will replace things when they get worn or broken over the term of having the deal. Which is all well and good, because obviously that is a great cost saving to the landlord. So when you're looking at providers, you really want to be looking at who do they serve? Is it autism? Is it vulnerable people? Is it asylum seekers? There's a whole criteria of different clientele out there, of people with disabilities. You know, social housing is a lot more your LHA rates, supported living, that can be LHA rates, but that can be more specialist. If the more specialist the provider is, more the more potential monthly fee or rent, should I say, they're happy to spend. But the property has to be right for them. So people say to me, What comes first, Mark? Is it worth finding the deals and then the providers, or finding the providers and then the deals? So basically, from my perspective, what I like to try and do is find the providers and then know exactly what they're looking for. And that's what we do in social spaces. So we work with providers that come to us and say, This is what we need in this area, and we are looking to pay these sorts of rates. I then have a nice big list of landlords and investors that I work with myself. I've built up over the last eight years, and I reach out to people and also deal sources as well, the right deal sources that I can trust and can work with. And what we try and do is put the pieces together. So if you are interested in that, then do reach out to me because we might be able to help you with your property. And as I say, all we do is put the two together. We charge a sourcing fee or like a tenant finders fee if you like for finding the right provider for your property. And we cover the UK. So it's something that we can help you with. Also, I've got a lot of my students in my property community, ETA, which you're more than welcome to come and join and be a part of, where we will help those guys and girls as well find properties, make money from finding properties as much as sorting out their own. So there's a few different avenues where you can start to make money quite quickly and do the right thing and help people and charities as well. But back-to-back leasing is very, very good. But as I say, you've got to get that relationship right with the owner. You've got to have the providers and really understand what the providers are looking for and what they need, and then you can start to bring it all together. Contracts that you use in these will be normally lease agreements. So make sure that they are watertight lease agreements with the relevant break clauses and all the different structure that needs to be in there as well. There is a lot of value and a lot that you can offer landlords by going through and doing this strategy. But you've got to do it in the right manner and you've got to go into it, I believe, with the right intentions. For me, when you're dealing with whether it's social housing, supported living, temporary accommodation, you've got to go in more for the end user and think about what their needs are rather than going into it just thinking this is a great way for me to make money. Okay, if you're just going into it with the money mindset, then chances are you're not gonna really ever grow anything successfully. You will make money out of this, but you want to do it in the right manner. And I find this very, very rewarding strategy to actually do. And as I say, back to backs can work, but if you're just running around saying, well, that's all I'm gonna do is back to back, back to back, back to back, chances are you're gonna struggle with that. There's a time and a place for anything like this. So, as I always say, you want to be the property professional in your area. I don't go and look at all of my property investing deals as rent to rents. I'm gonna do a rent to rent, I'm gonna do a rent to rent. Yes, I'd like to do potentially a rent to rent on a deal, but I might go in there and try and do a lease option on it, I might try and buy it, I might not even, there might not even be a deal to be had on it. So it's all about making sure, as I say, that you're setting yourself up in the right manner. Now, if you're quite good at sourcing deals and properties in your area, you've got a bit of a maybe you are a deal sourcer, and you're you've got some landlords who have got properties that potentially they're not HMOs, or they they can be, or they're HMOs that aren't working well, or they're single lets that just aren't going to really work as serviced accommodation, and you just don't really know what to do with those sorts of properties, then as I say, reach out to us at social spaces, and you can reach out to me at mark at socialspaces.uk. Send me across what you've got, I can send you across what we need to know, and we can see if we can pair anything up, any properties up with the providers that we have and that we're working with in the areas that you're working with. At the moment, we're still working on building up our areas, but we have a lot of areas covered and we have a lot of requirements that we're trying to sort out. Now, that doesn't necessarily mean that I can say to you you're going to be able to do a back-to-back on it, but we can have a look at all of the different opportunities that are brought to the table and see what we can do. If you bring us a property and we do a deal, we will, as I say, charge the landlord normally a month's rent or a six-week fee, depending on how long the contract is and how much it's worth to the landlord. Because obviously, if we're doing a lot of legwork and helping them and bringing this all together, we charge us an outright fee, then we leave the two together. Happy days, and that's what it's all about. We're happy or more than happy to split that with anybody who's finding properties that they can bring our way. Now you need to know what the owner is all about. You need to know that the owner of the property is happy to do this. You also we need to check that the charities that are going into these properties, that the mortgages on these properties are the right mortgages because nobody wants to be in breach of their mortgage because they put a charity in a property and it's in breach of their mortgage conditions. So it's very, very important to not overlook that. Very similar to service accommodation. If you are doing rent to rent and it's on like a buy-to-let mortgage, that mortgage provider might not like you doing short-term rentals with it. So we just need to make sure that we are the property professionals that we need to be and we do things in the right manner so that we get the results that we're looking for. I have some training in education to action, which is coming out, depending on when you're listening to this, but it's coming out in April, May of 2026, and it's going to be all about how to do back-to-back leasing and also how to work with supported living social care providers and how to find those and how to structure deals with those, and the things that you should look out for, and the things that you need to make sure that you've got in place. So, again, all of my community members on the modest monthly fee that we charge them will get access to that. And if you don't want to join a community but you'd like to go through those trainings, then we will be able to sell those trainings as well. So we're always here looking to help and support everybody and making sure that you're doing the right things in your property investing. So if you have any questions on this, then reach out to us, be more than happy to have a chat with you. But rent to rent isn't dead, far from it. You just need to, as I always say, do it in the right manner. Back-to-back leasing is a great other tool to use if the circumstances align, if you have the providers, if you have the landlords on the same page as you, then we can certainly show you how to do successful deals in this manner. So I hope you've enjoyed this episode. If you have, please feel free to like, subscribe, share, and leave a five-star review. If you haven't enjoyed it, don't leave a review. But I thank you for your time today, and I look forward to you joining me in the next episode very soon. Take care and bye for now.