Letting to students can be a great idea if you own a Buy to Let property in a university town. Students can bring in a predictable and steady rental income and many student tenants are willing to pay premium rents to be able to live in close proximity to university facilities and local amenities. While student lets can offer a guaranteed demand for accommodation with predictable rental yields, landlords need to think carefully before they enter the market. There are more risks associated with renting to students than other tenants, including a higher incidence of noise nuisance, damage to property and rent arrears. However, most of these situations can be managed with the right preparation, allowing you to make the most of the advantages and avoid the worst of the problems.
Find the Right Location
Probably the most important aspect of any Buy to Let property is its location, and this is especially true when finding the right property for a student let. You should consider buying a property near the university of course, but also make sure that it is near amenities attractive to students, such as transport links, supermarkets, take-aways and pubs. If you don’t know the area where you are buying, go and visit, and contact the university’s accommodation services to find out where students want to live and the market rents currently being charged.
When looking for the right kind of property for student lets, think about the number of rooms available. Large Victorian houses near the university campus with six or more rooms can provide perfect accommodation for student sharers, while two room apartments in a city centre can be attractive to older graduate students. One of the advantages of student property is that you can charge rent for individual rooms, but remember that houses with more than five tenants are classified as HMOs (houses in multiple occupancy) and require a license from the local council.
Doing your research is an important part of becoming a student landlord. For example, make sure that you check out the crime rate for the area where you would like to buy because student properties are often a target for burglars. At the same time, think about the number of similar rental properties in the area. If there are a lot of other rental properties, competition for tenants is likely to be fierce, while in suburban areas students could been seen as nuisance neighbours by residents who are looking for peace and quiet.
Getting Ready for Your Tenants
When you prepare your student property to let, remember that you will need to create an interior that appeals to your tenants. You may decide to renovate a larger home into individual study bedrooms, creating a HMO. Consider what kinds of shared facilities you will provide, such as shared bathrooms, a kitchen and perhaps a communal living area. Remember that students will not expect top-of-the-range fixtures, just clean, smart and hardwearing furnishings that allow them to live comfortably.
Parents may accompany students to view student lets, so make sure all the basic facilities are in good working order; substandard accommodation will be rejected. Bear in mind that parents are often the people who pay the rent, or are guarantors, so they might have a say in where their son or daughter lives.
As a landlord you will be responsible for the structural integrity of your property. If you decide to convert your rental into a HMO you must ensure that your property is not damp and that it is free from pollutants such as asbestos, carbon monoxide and lead. You must provide accommodation with appropriate heating, sanitation and water, and you should ensure that plumbing is adequate for heavy use. It is a good idea to invest in good quality white goods, as they will be heavily used. Remember that you won’t be able to let your rooms until the council issues the property with a HMO license. Investing wisely in your property is likely to pay dividends in the future.
Appealing to Students
If your property is in an area where there are a lot of similar rental properties, you may want to offer features that will appeal to students. This could be by offering a rental fee that includes utilities and council tax, or you might want to make wireless Internet available for your tenants. It might be a good idea to have your own presence on the Internet, such as a web site where students can look at details about your property and even apply to live there. You can also offer students more modern ways to pay their rent, such as by PayPal or electronic transfer.
Another way to attract students in a competitive location is to get your property accredited and listed on the university accommodation website. This can reassure parents and students that your property is a good place to live and can also provide a steady stream of tenants.
If there is a lot of competition you can offer students different lengths of assured shorthold tenancy (AST). Most landlords only offer annual tenancies, despite the fact that students only need to live near university during term time. You can decide to offer nine-month ASTs tailored to the term dates of the local university, offering your property to other tenants or tourists during the summer months to prevent void periods. This may mean that your property is first choice for students who want to save money by going home in vacations.
Always carry out careful checks on all prospective tenants, arranging a meeting to get to know them, carrying out credit checks and asking for references. Make sure that you ask a parent or guardian to co-sign the tenancy agreement to ensure that you will receive your rent no matter what the financial situation of your tenants.
Set Clear Ground Rules
When renting to students it is important to set clear ground rules for the tenancy. Try to be professional in all your dealings with your tenants. To cover the increased risk of property damage, you should ensure that the security deposit reflects the costs that may be incurred to bring the property back to a good standard at the end of the tenancy. You should also ensure that the tenancy agreement makes your tenants jointly responsible for the rent, so that if one student leaves the others are responsible for paying the rent until another tenant moves in.
Make sure that you have clear policies on noise, cleanliness and parties, giving clear guidance on what is expected and what may result in penalties or eviction. Have a clear policy on visitors, because if anyone moves into your property without a tenancy agreement, you will have no comeback if there are any problems.
In addition, set clear move-in and move-out dates, making it plain when the rent is due and how many months the tenancy agreement lasts. Make regular, pre-arranged visits to the property in order to make sure things are going well and that there aren’t any outstanding maintenance issues. Leave time between tenancies in order to refurbish, repaint and refresh your property.
Cover Your Legal Obligations
When letting to students, as with other tenants, you will have to ensure that you have covered all your legal obligations. As well as licensing any HMO, you will need to ensure that your tenant’s deposits are protected in a Government Deposit Protection Scheme, that any gas appliances have a Gas Safety Certificate and that your property has adequate insurance and security features. A Letting Agent can manage all of these aspects, or you can decide to do it on your own.
Once you have done your research, prepared your property and covered your legal obligations, you can start to enjoy the benefits of letting to students.