Jump to content

Letting to students. Bad idea?


Recommended Posts

Hi.

I went to view a student HMO today which was on sale as an already let package, and ready to go.

Of course, it being lovely and warm today, the students had all the heating on same as usual.

Towels on radiators and galloping mould growth in the shower room. Lovely.

Putting all that aside though- for me, a student let seems like a sensible idea. Students are pretty reliable in terms of not getting into arrears, and the yields are pretty good.

This is a 4 occupant house, 2 storey, £155k let on a yearly basis with three rent payments of £5000 (equates to £1250 pm) and a fixed vacant period in the summer.

Does anyone have any experiences with student lets they would like to share?

Monthly bills are a bit of a worry - I'm thinking of £500 per month for heating and other expenses averaged over the year.

Sound about right?

Link to post

I work for a letting agency in Edinburgh and the best advice I can give for a student rent would be forward planning.

Fit extractor fans which switch on with the lights in the bathroom and kitchen. This should prevent moisture building up in those rooms.

Buy good solid second hand furniture which is relatively modern. Avoid flat-pack furniture like the plague, students manage to break/burn everything.

Supply mattress protectors with every tenancy. No need for an explantation here...

With the above in place, they can be ideal tenants especially if they have guarantors.

Link to post

Thanks a lot Dale - those all seem great suggestions.

 

Our offer has been accepted so it does look like I'll be putting your ideas into practice soon.

 

 

Any ideas on how to keep the fuel bills down to reasonable levels?

 

I'm thinking of offering some sort of incentive to the students ie £100 cashback at the end of each term if the meter readings are below a certain target.

Link to post

I have to say Richard, the rent inclusive of bills is new to me too. This isn't permitted in Scotland (as far as I know), it certainly isn't the norm.

 

I've read a few books on Student HMOs which mention this. If this is a popular thing in the rest of the UK, I'm sure there will be some special landlord tariff with a utility provider somewhere?

Link to post

I have to say Richard, the rent inclusive of bills is new to me too. This isn't permitted in Scotland (as far as I know), it certainly isn't the norm.

 

I've read a few books on Student HMOs which mention this. If this is a popular thing in the rest of the UK, I'm sure there will be some special landlord tariff with a utility provider somewhere?

 

I think it varies from city to city, but in many places the norm is to include bills. Which doesn't exactly incentivise turning the lights off, or shutting the window instead of cranking up the heating!

 

When bills are included, it's common to include an "allowance" up to a certain monthly amount, and charge for any usage over that amount.

 

In my day we had to sit around dividing up the electricity bill by six and collecting cheques from everyone...don't know they're born etc etc :)

Link to post

Rob -

Aye - we had to live in a shoe box in t' middle of t' road!

 

etc. ^_^

 

- but you are right it does seem that whether or not bills are included depends on location. I guess it all boils down to the same thing in the end.

 

I might go the high-tech route and look at smart heating systems which regulate the heating automatically depending on occupancy, outside temp etc. If I find a good solution I'll share it here.

Link to post

I invest in student HMO's and agree with all of the above. I would add a couple of things:

 

I would allow 10% of your rent for ongoing maintenance, and obviously if you cover bills these will be on top. 

You should budget to do minor refurbs (carpets, decorating, refresh kitchen/bathrooms) every 3-5 yrs to make sure your property continues to rent well each year, particularly with the increase in purpose built accommodation.

Most importantly, if you're not managing the property yourself make sure you have a great letting agent. It will make all the difference. If you are managing yourself, make sure you have trades you can call on quickly as students are very adept at trashing stuff and not knowing how to get things to work…most of them have not lived away from home before. Expect lots of panic calls about how to turn the hoover on etc etc  :)

 

Apart from that good luck! Let us know if you have any other qns.

Link to post
  • 1 month later...

Hi Richard,

I am new to all of this so you may have to bear with me.. Having recently graduated from university and renting 2 massively contrasting houses in terms of quality and landlord over the last 2 years I thought it may be helpful to let you know what we as students found good & bad.

Our first property was rented from a company called student cribs (you may have heard of them). They were excellent. Good solid furniture, well insulated house, decking in the garden (no maintenance for us), wifi & sky already set up and included in the rent (saved a lot of hassle from our point of view). We had checks every term (3 times a year) which we could let the landlord know if there were any problems that needed sorting, we had a cleaner come in and do a "deap clean" once a term as well. All of this included in the rent. I know you may be thinking "they don't know they've been born etc etc etc" ;) but it generally made a difference in the way we (6 lads) treated the property, as we moved in to a good tidy well furnished home we respected that.

However in our second place it was quite the opposite we moved in to the house being an absolute state, very dated, poor utilities, dirty, and as mentioned previously, flat pack cheap furniture which didn't survive the first week. Our tv, oven and microwave died on us the first month and didn't get replaced until the third month as the landlady had to wait for her insurance to cover the costs.

Another downside was the garden, which was all lawn with hedges around the perimeter. The lawn quickly became overgrown and the hedges became wild. Compared to next door who had a gardener once a month just to tidy things up a bit made a big difference in the demand for that property as it was seen as a bonus to have the garden.

I guess what I'm trying to say is that as students we respected the well kept house and took care of it, demand for the property after we left was huge, and we didn't mind paying the extra £20 a month each included into our rent to cover these costs. As although it sounds incredibly lazy (students) we simply would never get round to doing it. Word soon spreads through university's and years what is THE house to be in and it doesn't take much to make it yours.

I hope this is of some help to you.. :)

Link to post

I guess what I'm trying to say is that as students we respected the well kept house and took care of it, demand for the property after we left was huge, and we didn't mind paying the extra £20 a month each included into our rent to cover these costs. As although it sounds incredibly lazy (students) we simply would never get round to doing it. Word soon spreads through university's and years what is THE house to be in and it doesn't take much to make it yours.

 

Thanks for the first-hand experience Simon! It's similar to the "broken windows" theory that was used to clean up NYC in the 1980s: if people live somewhere shabby they have no incentive to maintain it well, but if the people in charge are clearly making an effort they will step up too and keep it in a good condition.

 

Also, I remember trying to work out splitting bills 6 ways from my Uni days - I wouldn't call wanting everything included being lazy, it really is a nightmare to organise!

Link to post

From a legal position it's very much about having fail-safes in place so you can act quickly if there's a problem i.e. making sure your tenancy allows for regular inspections, credit checks during the term and afterwards if there are arrears, always have a good guarantor and a set time scale to escalate matters if there is a problem either with debt or a need to evict.

Happy to chat it through if you have any questions.

Mark Pollard

Vantage Law Solicitors

M: 07707 641 879

DD: 0151 229 1842

E: mark.pollard@vantagelaw.co.uk

www.vantagelaw.co.uk

Twitter: @VantageLawPI

Facebook: www.facebook.com/VantageLaw

LinkedIn: uk.linkedin.com/in/vantagelaw/

Link to post

I also have some experience managing student lets - I think Jon H might be a little generous thinking minor refurbs are only every 3-5 years, though it would depend on the state of the property to begin with. 

 

In my experience the end of every academic year involved several days work per property (3/4 bed terraces) with deep clean, fixing/replacing broken furniture, and repainting several rooms. Still worth it given good yields but it is more hands-on.

Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...