Renting to Students
Landlords with properties in university towns and cities have access to a large market of potential tenants. Students do not have large incomes but if properties are marketed properly to them they can be a very reliable source of rental income.
Obviously there are some risks attached. Students are not the perfect tenants, but not every student is going to have wild parties every weekend and wilfully damage your property. Many students will be keen on protecting their deposit, so will want to look after the place where they live.
Why should I rent to students?
There are a few reasons why letting to students can often be more profitable than traditional tenants:
- Student areas provide strong and consistent demand and competition for available properties
- A student tenancy typically lasts for a minimum of 12 months, meaning less stress for you finding new tenants
- They maximise your property’s earning potential – a two or three bedroom-property can house up to three students
- Students tend to mind less about older furniture or outdated bathroom suites – it’s not a long-term home for them
Try to consider things from a student’s situation. Moving to university is often the first time that someone has had to be responsible for what they do with their time and money. The initial freedom can be liberating, but they may not be best educated on how to use it. As a landlord you may have to be more tolerant about the way a student looks after your property, but within reason – there are rules that have to be complied with.
Which types of property are suitable for students?
All kinds of properties are suitable for students. As many students are happy to live communally with several friends, some landlords can easily rent out 4 or 5 bedroom houses. 2 or 3 bed terraced houses are often some of the most popular types of properties, but you will also find students living in modern flats and maisonettes when they have to leave their halls of residence. In larger properties it would be beneficial to have more than one toilet or bathroom. The tenancy agreement for a group of students living communally in one property is a joint tenancy. All the tenants are named in the agreement, and there is one agreement, not a series of different agreements for each individual.
When considering letting out your property to students, think about how well located it is for transport links to the university. Is there a bus stop nearby? If it is too far away from the campus it could put students off as potential accommodation.
Should landlords consider an HMO (Homes of Multiple Occupancy)?
Some students will want to rent on their own. It gives them some control over their own accommodation, without being affected by the behaviour of others. A House of Multiple Occupancy (HMO) is a property that consists of at least three people or two households sharing a kitchen, bathroom or toilet facilities. A household could comprise one person. In terms of student property, the building will usually be a semi-detached or detached property that is divided into multiple bedrooms.
Landlords pay the council tax of HMOs, rather than individual tenants. Tenancy agreements for HMOs are different to joint tenancies. Each ‘household’ in an HMO has their own individual agreement. HMO’s can also be sublet during the summer holidays. Should a tenancy end during the academic year, replacing one tenant in an HMO is easier than an entire houseful in a joint tenancy.
What furnishing should you provide for students?
Student tenants will often expect a property to be fully or at least part-furnished. This is because the accommodation will be temporary for them (if only for the duration of their course) and it isn’t cost-effective for students to buy furniture while they study (even if they work this will be part-time).
If you are intending to rent your property to students, you should provide white goods for the kitchen, including a washing machine, cooker and fridge freezer, and have these ready for use. You could consider providing a dishwasher and microwave too. Carpets and curtains should be provided.
To make the property more appealing to students, in each of the bedrooms it would be a good idea to provide a bed, wardrobe, study desk and chair. In the communal living area you could provide a sofa, although this is very much at a landlord’s discretion.
You could also provide a hoover and some basic cleaning products, as well as a lawn mower if there is a garden. Make sure all these items are included in the inventory.
How can you be a good landlord for students?
Renting to students can have different issues for landlords when compared to letting to working professionals or families. As well as standard responsibilities and obligations, such as gas safety certificates, it’s important that landlords be aware of the following:
Lay out your expectations for home and garden maintenance
Students are not experienced in property maintenance, but that doesn’t mean that they won’t care for the place they are living in. Check that your tenants know how to do the general maintenance that’s required; if there is a garden, provide the tools needed if you would like it to be maintained.
Show transparency
Create a set of rules and make sure your tenants know the consequences of not following them. Show student tenants what you can do to assist them and be proactive where possible. For example, this could be confirming that you’ve secured their tenancy deposit in a certified protection scheme.
Provide clear explanations
By providing clear instructions on the basic maintenance of your property, landlords lower the chances of things going wrong. This could involve showing the tenants how to put the electric back on after a power cut, restarting the boiler, or locating the stopcock. This will probably be the first time that students have been responsible for a property, and in the event of an emergency they could easily panic and make the wrong decision.
Be sure to explain changes in legislation that will affect your tenants or their tenancy. For example rent increases must be properly communicated.
Be reliable
Stick to what you say or do; many students would have heard countless stories of nightmare landlords, so proving how reliable you are early on will be well received. This could be something as simple as fixing a problem right away. Provide plenty of contact within the first month of the tenancy to show that you are happy to help.
Keep in touch with tenants about things they need or any maintenance of the property that needs doing. There are regulations around rights to access that prohibit you from simply turning up to inspect the property, follow the rules and agree regular, casual check-ins if that’s something you and your tenants can work with.
How else can you help with student lettings?
Finance is often a problem for students, but there are some initiatives that can help to give them better credit and become more reliable tenants. These are schemes that students might not be aware of. For example, the Rental Exchange Scheme is a way for tenants to build up positive credit histories by linking their rental payments to their credit reference agency profile.
There are a number of schemes, such as Credit Ladder, which reports rent payments to all the leading credit reference agencies. It motivates students to continue to pay their rent on time and in full, and improve their financial prospects in the future. Landlords, social housing providers, housing associations or letting agents with more than 500 properties can do this on behalf of their tenants, or private tenants can set themselves up on the scheme.
Marketing your property to students?
At haart, we can help you find the perfect tenant by combining technology with expert local knowledge. We can market your property in the right places. We’re also up to date on all the latest lettings legislation, so can help you with anything you have questions about.
If you are thinking of letting your property, get in touch with your local haart branch today.