To be successful in letting a property to students, you’ll want to maximise your two types of return – income from rent and (hopefully) the appreciation of the value of the property over time, while also providing as good an experience as possible for your tenants.
Buying the right property takes time. On average, you’re going to be spending anything from six weeks to eight months getting your hands on your property in the first place. The key consideration is timing. Bear in mind that student house-hunting is seasonal. Each city sees an annual yet predictable cycle of undergraduate, post-graduate, international student and clearing activity. You don’t want to leave yourself in the position of having a house renovated and ready to find, when most students have already found their house for the next year. This could result in at least a 12 month void in your first year.
Before you start refurbishing and marketing you’ll need to be legally ready to take on student tenants. If you’re planning to rent to a least five tenants and your property is at least three storeys high, then you will need a special licence. This is because the property will then qualify as an HMO (House in Multiple Occupation), and as such, will need to be licenced with your Local Authority. As part of this process they may also insist that your property meets certain standards before you can let. These standards will most likely include things like fire safety measures, sinks in rooms and rules regarding the use of locks on bedroom doors.
Adhering to these standards can be costly and take time (and the licence itself is going to cost a few hundred pounds as well). So if you’re letting to five students make sure you factor in some time for legal considerations.
Whilst you may have to make some compulsory improvements, you may also want to do a bit of work on the property in order to maximise your rental income. You need to make sure everything is in good condition before renting.
Where your everyday student property may differ from the standard model is in the composition of its rooms. For example, whilst many family homes require more living space, many student landlords convert any second lounges or spare rooms into bedrooms – thereby increasing their yield on (for example) a standard three bed, by up to 33% by offering a four bed option instead.
Increasingly property owners are opting to provide televisions inclusive in the rent, and ready-to-go Wi-Fi as an attractive proposition. Students are aware that moving into a house without the internet already connected can mean a wait of 6-8 weeks – not ideal during term time.
If your property isn’t student ready, you’re going to schedule in some time for renovating.
Read Part 2 of this guide for more information on marketing your property, signing the tenancy agreements and welcoming your new tenants.
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From 1st February 2016 landlords will be responsible for checking their prospective tenant’s right to rent. Find out more here.
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