If you’re looking to get into the letting business, renting to students can be a lucrative venture. However, it can also be risky and packed full of challenges; particularly for first-time landlords. This means that you need to get up to date on some prior reading, before taking the plunge.
If you’re a first-time landlord thinking of renting to students, below you’ll discover a brief guide of the main things you’ll need to know. You might find some students are easy to deal with, while others can be a nightmare. However, in terms of revenue generation, renting to students can be a very profitable business venture.
In this article, we will look at how Landlords can ensure optimum benefits by renting their properties to students.
What are the benefits of renting to students?
Although renting to students can be risky, it also comes with quite a few advantages. These include:
- Student accommodation is in demand
- Students typically require longer-term rentals
- The profit potential is huge
If your property is near to a college or university, you’ll find there’s always going to be a demand for student housing. This means you’ll never struggle to fill the property. Students also usually need a tenancy of at least 12 months, and you have the potential to earn a nice little profit.
Some students may want to rent by themselves, but the majority tend to opt for multiple occupancies. HMOs (Houses in Multiple Occupation) are common, with at least three students sharing the same accommodation. If you want to rent to five people or more, it will be considered a large HMO, requiring a license from the local council. You may even need a license for a small HMO so it’s worth checking this out in advance.
HMO tenancies are a great choice for first-time landlords as they ensure the rent is more affordable for each student and if one leaf, you’ll still have other tenants to cover the cost of the rent until a new tenant is found.
You’ll need a specialist insurance policy
When you’re renting to students, it’s important to take out an insurance policy. You’ll need specialist student landlord insurance, which basically adds an additional cover if required. If you don’t tell the insurer you’re renting to students, when it comes time to make a claim you could find your policy doesn’t cover it.
Things to consider
There are a few factors to consider before you do rent your property to students. For example, you’ll most likely need to offer a furnished property. Most students aren’t going to have their own furniture. So, if you want to get student tenants in quickly, offering furnished accommodation is recommended. You’ll also need to ensure the students have an exemption certificate for council tax. If you can’t prove that you were renting to students, you’ll be responsible for paying all backdated council tax.
As you can see, there’s a lot to consider when you’re thinking of renting to students. However, when done correctly, it can be a particularly lucrative venture.