Renting to Students. Here’s What You Need to Know?
When it comes to renting a property to people, students can normally be a good bet for tenants. If you have a property in one of the university towns, then the potential yield for students can be very good. However, there are several things that you need to know before you let your property to students.
Tenancy Agreements
You have a couple of options when it comes to structuring your tenancy agreement. Generally, you will want to rent a whole property to a group of students on a joint tenancy. This means that the students will be jointly responsible for paying the rent on the property. The group of students will sign a single tenancy agreement, and this also means that if any of the students drop out then they are responsible for finding a replacement or for making up the shortfall in rent. It also means that if any individual fails to pay their rent then you can pursue other options such as guarantors for the missing rent. The alternative is to rent rooms on an individual basis then you can give each student their own tenancy agreement.
HMO’s
An HMO is known as a house in multiple occupation and is the name given to a property that is being rented by a group of people that are not living as a household. This normally means that they each get their own room (which is normally lockable) and share other facilities like kitchen and bathrooms. If you have a property that is at least 3 stories tall and you rent to a minimum of 5 different people who are not living as a household, then your property is classed as a ‘large HMO’ and you will require a license from your local council in order to be able to let it. This will also mean you have to meet certain requirements in your property as well. Some councils also require smaller HMO’s to be licenced as well, so you will need to check with your local council.
Council Tax
When letting to students, you need to be aware that students are exempt from paying council tax. They will normally need to provide the council with proof of their student status from the university they are studying. If any are unable to provide this proof, then you might get stuck with the council tax bill.
Insurance
If you are planning on renting to students, then when you buy your landlords insurance you will need to tell your insurers that you are renting to students. If you have previously rented your property and are now renting to students for the first time, then you will need to notify your insurer as you may need to amend your policy. You will want landlords building insurance to cover the physical building, and you may also want to take out landlord’s content insurance to protect any of your furniture that is in the building. You will need to remind your students that any of their own property is not covered by your policy and they will need their own.