Renting a property to students is different from renting to professionals and other domestic households: there are lots of steps to becoming a successful student landlord, but it’s worth the effort, as it can be a lucrative source of income.
From buying a student property to getting it ready to market and rent, follow this series of simple steps to make sure you adhere to the correct legal and safety procedures.
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Buying a property
Buying the right property isn’t something you should rush, as it’s a major financial investment. It can take anything between two to six months to find the ideal property that you can afford.
Remember that renting to students is seasonal and that many potential tenants start searching for accommodation up to a year in advance. Bear this in mind when buying and renovating a student house, as you shouldn’t end up in a position where it’s ready to rent out, but most students have already found their accommodation! This could result in your property being empty for the next year, which could be disastrous in financial terms, especially if you need to get some money back on your investment.
Understand the rules
A student house is governed by the rules for HMOs. Student landlords often convert any spare rooms or second lounges into self-contained student rooms, as it can make more money. Studies show you can increase your income by around 33% on average by converting sitting rooms into bedrooms.
When you rent to a number of individuals, rather than a family, your property is likely to be considered an HMO, which means you’ll need a licence before you can accept tenants. Check with your local authority to find out if you need such a licence. If so, they may wish to inspect your property to ensure it meets the specific standards for maintenance, repair, fire safety and cleanliness.
Taking the appropriate fire safety measures is one of the most important aspects of renting out an HMO. Landlords need to carry out a fire risk assessment in shared areas to identify the general fire precautions that must be in place. This includes identifying escape routes in the event of a fire.
The landlord must also provide fire and smoke alarms. It is becoming more common today to install radio-linked heat and smoke alarms with ten-year sealed batteries, rather than mains-powered alarms, especially in retrofitted houses. This saves on the costs of an electrician, as systems such as this can be installed quickly and they are just as effective.
Safety standards might also include whether there are sinks in the individual rooms and whether each bedroom door has a lock.
Furnished or unfurnished?
The key question is whether you should let your property furnished or unfurnished. First, you should understand what the two terms mean. Unfurnished doesn’t mean totally empty, so it’s not a case of letting it on the cheap! A landlord should include a fridge, freezer, cooker, washing machine, bathroom fixtures, carpets and blinds at a minimum.
The requirements of a furnished property are open to interpretation and one landlord might include more than another. Furnished houses tend to be popular because they can be kitted out to the landlord’s standards, with high-quality furniture that meets fire safety regulations.
If a landlord permits tenants to bring their own furniture, there’s always a chance that it won’t be good quality and it might not even meet the mandatory safety laws, leading to risks for the tenants and ultimately the landlord.
As a general rule, a furnished property must include the basics of an unfurnished property such as the cooker, fridge and other white goods – and also settees, armchairs, dining table and chairs, chests of drawers, wardrobes, desks and beds.
It’s easy to kit out a furnished property these days, as landlords don’t have to go through the hassle of buying individual furniture items and transporting them to the rented house. It’s simpler and more cost-effective to use the services of a professional company that provides student room packages. These can include everything from basic student essentials to bespoke student furniture to suit every landlord’s requirements and budget.
Advertising your property
Once your property is ready, get it seen by marketing it properly. Look online for a local student-focused letting agency who knows just how to market your property. They can also help arrange viewings, which otherwise will take up a big chunk of your time.
You can also liaise with the university to ask for their help. Some universities or students’ unions have their own letting agencies set up to help accommodation-hunters.
You can also use the power of Facebook and other social media to advertise your property or place an ad on a well-positioned noticeboard at the university.
Before finding tenants, draw up a tenancy agreement and make sure you’re legally ready to take on students. There are templates available online to help if you’re new to student lettings, or you can seek the advice of a solicitor if in any doubt.
Many student landlords require each tenant to have a guarantor, such as a parent or guardian, who will guarantee the rent payment if the student defaults. If this is the case, the guarantor agreement should be signed at the same time as the tenancy agreement. When the agreement has been signed, if you requested a security deposit, you must meet the statutory requirements and register it with one of the approved schemes in the UK.
Maintaining your property
It’s a common misconception that students don’t care where they live! Just like everyone else, they prefer to create an environment that feels like home. Making sure your tenants live in pleasant and safe surroundings not only fulfils your legal requirements as a landlord, it also builds a good relationship with your students.
As well as ensuring your statutory requirements are met, you may also like to do some work on the property to make it more desirable to live in and maximise your income. Some landlords are including a TV set in student accommodation, inclusive in the rent. They also provide WiFi as an attractive extra, as this is something all students will find useful. Moving into a house where the internet isn’t up and running means a possible four to six-week wait for a connection and this could deter potential tenants from moving in.
Don’t forget to take out the appropriate student landlord insurance. This is very important, as normal private house cover will not necessarily cover you as a landlord, so in the event of an emergency, you may end up out of pocket.
Impact of Covid-19
The Covid-19 pandemic has meant challenging times for landlords and students alike, as all of the UK’s educational establishments were closed down overnight back in March when lockdown began.
Now, the future is looking a little brighter after the government announced a return to classroom education in September, in time for the new autumn term. This is good news for landlords who have been left with empty properties on their hands, as students are again looking for accommodation.
With the short time-scale involved, landlords are experiencing a sudden increase in enquiries as students who have just received A-level results are clamouring to get into their chosen university and find rented accommodation.
While the pandemic has been challenging for everyone, the current situation of a return to education could create something of a boom time for student landlords.