Being a student landlord involves many different steps, which property portal StuRents.com will talk you through in this article. You’ll learn more about purchasing property and getting it ready for marketing to student tenants, and all the paperwork that goes with it!
If you’re curious about how to become a student landlord, it’s best to start at the very first step…
1. Buying the property
To be successful as a student landlord, 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 rent after 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 of being a student landlord.
2. Get your paperwork in order
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 licensed 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.
3. Working on the property
While you may have to make some compulsory improvements, you may also want to do a bit of work on the property 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, while many family homes require more living space, many landlords convert any second lounges or spare rooms into bedrooms – thereby increasing their rental 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 need to schedule in some time for renovating.
4. Get your property seen
Once your property is ready to market, you’re going to want to get as many eyes on it as possible – as soon as possible. While the academic year is definitely seasonal when it comes to lettings, there is an all-year round demand for short term lets, so as soon as your property is ready you’ll want it on the market.
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. Of course, you will need to factor these management fees into your income calculations and decide whether it is right for you.
5. Sorting out the paperwork
Make sure you’ve got your contracts and agreements written up before you find your tenants. There are many templates out there so this shouldn’t take much time at all.
For example, the government offers a template and universities are likely to have one they issue to prospective landlords. If you end up using an estate agent to market your property, they will have their own templates as well. If you want anything specific in these contracts that is not covered, allow more time (and maybe money) to take advice and get things drawn up to your satisfaction.
The majority of landlords for students require each tenant to have guarantors to financially guarantee rent. This is often a parent or guardian based in the UK. A guarantor agreement will also be required alongside the tenancy agreement. You should expect this process, including signing by all tenants and guarantors involved, to take a few weeks.
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.
6. Handing over the keys
As with any type of letting though, there are risks. Therefore, before handing over the keys you’ll want to put as many safeguards in place as possible.
It’s a good idea to provide tenants with a ‘welcome pack’ when they arrive. This can contain lots of helpful information regarding the local area, and can be a useful way of telling your tenants (as nicely as possible) what is expected of them and how to look after and maintain the property. It’s also a way of demonstrating your credentials as a student landlord and what they can expect from you.
You should also evaluate the state of the property before the students move in (and it’s always best to do this just prior to handover). This will involve drawing up an inventory of all furniture/appliances and fittings that come with the property, along with taking photographs of all rooms. That way you can 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 as well, so that you have clear recourse should your photographs end up on the better side of a before/after comparison. There are plenty of inventory companies out there if you do a little research in your local area, and most estate agents will provide this additional service for you.
Once all this is done and the keys are handed over, well done! You’ve become a student landlord. If you’d like more student landlord advice, or are looking for student landlord insurance with us, get in touch with our team.
This post has been contributed by StuRents. StuRents has been listing student accommodation in the UK for free since 2008 and lists over 160,000 bed spaces across all major university towns and cities.
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