How to become a student landlord

If you own a property or are looking to buy a property near a university town or city, you may want to consider becoming a student landlord.

Rather than become a regular landlord, a student landlord can be a fantastic way of getting a return on your investment and can be a great long-term money earner . Every year you’ll have a fresh batch of students looking for accommodation to stay in while they study.

On average, university students stay in their accommodation for between one and three years while they study for their degree.

Here at Adrian Flux, we’ve put together a list of the steps involved with becoming a student landlord, as well as information on how being a student landlord differs from a regular landlord and how you can make the most of the experience.

Ensure you pick the right area to invest in

Like any sale on the property ladder, research is key. If you’ve decided that being a student landlord is for you, then you’ll want to make sure you get the best return on the budget you have available to you.

Things to look out for include:the average price of rental yields in specific areas
the reputation of the university and/or city/town where you’re looking to buy
the crime rate as you’ll want to avoid areas that have a high crime rate

All of these factors will play a big role in the types of tenants you’re able to attract.

If you’re fortunate enough to invest in a property that has multiple universities nearby, this will of course increase your chances of finding tenants tenfold.

Purchase and furnish the property

In the current market, it takes around five months to purchase a property and that is provided everything goes according to plan. If you’re planning on renting a property to students it’s a good idea to try and make sure you sort your property ahead of the summer when a new batch of students will be looking for somewhere to live.

While you’re likely to have students stay in your property for the majority of the year, it’s worth remembering students will need to get their temporary housing sorted ahead of the new university year in September, so make sure you get any renovation and furnishings sorted before you advertise the property to rent.

You don’t need to worry too much about furnishing the property, but as this will likely be the first time students have lived anywhere apart from their parents’ home, it is a good idea to include some basic furnishings to make the place more appealing.

These include a bed for each bedroom, along with a wardrobe, desk and chair. While it’s always a good option to include a sofa, coffee table and television in the communal living room. In the kitchen, ensure there is a working oven, fridge-freezer, dishwasher, washing machine and microwave. And, of course, students will need WiFi during term time to help with their studies.

Other compulsory items such as fire extinguishers and smoke alarms will be needed in Houses in Multiple Occupation (HMO).

Create a suitable tenancy agreement

Before you start refurbishing and marketing, you’ll need to be legally ready to take on student tenants. It’s important for all landlords to create a tenancy agreement that clearly states the rules and expectations that must be met by both the landlord and the tenants.

This should include standard information, such as how much notice is required if tenants want to move out and when rent payments are due. However, this may be different for rentals with multiple tenants. For example, you may want each person to have their own guarantor, as they are from different households and may not even know each other.

Once the contract is signed, if you have requested a security/damages deposit then you will need to meet statutory requirements to register this deposit with one of the three regulated and approved schemes.

Know the rules for HMOs

If you’re renting your property to three tenants or more, then it will come under Houses in Multiple Occupation, also known as a HMO, which has specific rules and requirements that need to be met.

As a student landlord, chances are you will meet the HMO threshold, which is:

at least three tenants live there, forming more than one household
you share toilet, bathroom or kitchen facilities with other tenants

Your home is a large HMO if both of the following apply:

at least five tenants live there, forming more than one household
you share toilet, bathroom or kitchen facilities with other tenants

A household is either a single person or members of the same family who live together. A family includes people who are:

married or spouses living together – including people in same-sex relationships
relatives or half-relatives, for example grandparents, aunts, uncles, siblings
step-parents and step-children

Most local authorities require you to register for an HMO licence. If you’re unsure if this applies to you, get in touch with them for clarification. You must ensure the property is not overcrowded and always kept in good repair.

Advertise your property

Once your property is ready, you’re going to want to get as many eyes on it as possible in a short space of time.

There are some ideal student-focused letting agents in the market who know exactly when and where to market your property. They will also be a major help in managing the flow of viewings, which can be hectic in the busy season. Factor any management fees into your income calculations to help decide whether this is the right approach for you.

You can also engage with the university to find out more about letting your property to students, as some students’ unions or universities will have their own letting agencies set up to support student house-hunters. Failing that, it could be as simple as placing your property advert on a well-positioned noticeboard on campus to get your property seen by the right people.

Hand over the keys

Before the tenants move in, evaluate the state of the property and draw up an inventory that confirms the condition of any fittings, fixtures or furnishings. You could also take photographs of all rooms to keep track of any loss or damage incurred during the student’s residence.

Make sure the inventory and photographs are signed off by the students upon arrival to minimise the risk of deposit disputes when the tenancy comes to an end.

If you’re feeling particularly generous, you could also provide tenants with a ‘welcome pack’ when they arrive. This could contain helpful information about the local area, as well as information on how to maintain the property – such as where to find the utility meters.

Remember to get cheap student landlord insurance

To talk to an expert about your student landlord insurance needs call 0800 369 8590 or book a callback at a time that suits you. Our best rates are always available over the phone.

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