Letting property to students - 7 top tips
Letting a property to tenants can seem like a daunting task. One need not look far to find horror stories about non-paying tenants, trashed houses and council noise complaints.
But, in reality, student tenants can be a reliable and remarkably hassle-free source of income for landlords. The majority pay promptly, look after the property, and are relatively undemanding.
So what do you need to consider if you are letting your property to students?
1. Choose your property carefully
Choosing a property is the first, and potentially most important step when considering letting to students.
If you are looking for a new property, you should consider location above all. Students traditionally want to be close to their friends so, where possible, try to find property in close proximity to university buildings or existing student areas.
You should also consider the size of the property. Many students wish to live in relatively large groups, so you may find it easier to let properties with four or five bedrooms. Properties of this size also often yield higher returns.
2. Get accredited
Many universities have a list of accredited landlords that they will recommend to students. This list is often the first port of call for students looking for accommodation, so it is important that you are on it.
Getting accredited by a university is generally a simple process. You should contact the student services department of the relevant university for more information.
3. Find sturdy furnishings
Many student tenants are not too bothered about flash kitchens or brand new sofas. That said, cheap furnishings are generally a false economy; they do not last, particularly in student accommodation. Instead, you may wish to focus on finding sturdy furnishings, fixtures and fittings that will be able to withstand the occasional excesses of student life. Although this will increase your initial outlay, investing in good quality items will likely save you money in the long run.
4. Learn the law
If you let a property to three or more tenants, and these tenants form separate households but share a kitchen, bathroom or toilet, you may be required to apply for a license. Properties of this type are known as houses in multiple occupation (HMOs), and are regulated more strictly than other property types.
Not all HMOs require licenses. Local authorities have the power to determine which property types must be licensed, so if you think you may be affected you should contact your local authority directly.
5. Don’t bet on capital appreciation
Student properties rise in value more slowly than other property types. So, if you intend to invest primarily for capital appreciation, letting to students may not be the best option for you.
Student properties can be converted back into conventional accommodation if the need arises. But it is worth remembering that this can be an expensive prospect - particularly if you have converted a living room into a bedroom, as is common in many student houses.
6. Prepare an information pack
Before tenants move in, make sure that they have all the information they need look after the property. It is often worth compiling an information pack with details of things like recycling and rubbish pick-up days, and a quick rundown of their responsibilities.
You should also make sure that important items are properly labelled. This includes stopcocks, fuse boxes and meters.
7. Use guarantors
Students will often be unable to provide credit or employment references, and this puts off many prospective landlords. You can give yourself an extra level of security in these circumstances by requesting that tenants provide guarantors.
Guarantors are generally parents or guardians, and are subject to credit checks. In the event that the tenants do not pay their rent, the guarantors become liable.
Student tenants can be a great way of generating regular income from your property. As long as you are properly prepared, your tenancies should go off without a hitch.