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How to become a student landlord

How to become a student landlord

Whether you’re already a landlord and you’re looking to expand or diversify your portfolio, or you’re new to property investment, letting to students is a market you could consider. Student lettings are well known for producing attractive returns, while students also tend to commit to properties for at least 9-12 months, meaning fewer void periods.

But letting to students is a niche market and there is a lot for you to consider. This guide can help…


Staying compliant as a student landlord

Staying compliant when letting any kind of property is hugely important – both for the health and safety of your tenants and to avoid large fines or legal action.

And with most student rental properties being classed as Houses in Multiple Occupation (HMOs), there are additional regulations you’ll need to be aware of.


What is an HMO?

Houses in Multiple Occupation (HMOs) are properties that are let out to three or more people from different households, who share kitchen and bathroom facilities.

As students are, more often than not, renting a room on an individual basis with friends, the majority of student lets are classed as HMOs.


What are the licensing regulations on student HMOs?

Your student rental property will be classed as an HMO if it’s let to three or more tenants from different households.

If your property is let to five or more people from different households, it will be classed as a large HMO and will require a mandatory licence.

Even if your property is let to fewer than five people from different households, you may still require a licence depending on your local authority.


Other regulations on student HMOs

As well as licensing, other HMO regulations include:

• Rules on minimum room sizes

• Fire safety rules, including supplying extinguishers, fire doors and fire blankets*

• Installation of smoke and CO2 alarms

• Gas safety

• Furniture and furnishings fire safety rules

• Fitness for Human Habitation rules

• Maintaining the structure, water, gas, sanitation and electricity supplies

• Electrical safety and Electrical Installation Condition Reports

• Right to Rent rules

• Tenancy deposit protection

• Legionella risk assessments

• General Data Protection Regulation (GDPR) legislation

• Rules on tenant fees


Do landlords pay council tax for students?

If you rent out a property to full-time university or college students, the property is exempt from council tax – meaning neither you nor your tenants have to pay it.

A ‘full-time’ student is someone who spends at least 21 hours a week on their course over at least one whole academic year.

Students studying part-time aren’t exempt from council tax, so your property will receive a bill in this case and the student would be liable. If they don’t pay, however, the liability would shift to you as the landlord, so establish who will be paying when letting to part-time students.


Who pays the other bills in a student house?

Responsibility for other bills in your student property will depend on your tenancy agreement with your tenants. Other bills could include:

• Water

• Gas

• Electricity

• Sewerage

• Broadband

• TV subscription service

You could opt to include these bills in your rent charge, or you could make paying for utilities like this the responsibility of the students you let to through your tenancy agreement. Often, including bills within your rent can make your property more attractive to potential student tenants, who won’t have to work out the split of bills between them each month.


Landlord insurance for student accommodation and tenants

Having a good landlord insurance policy in place is vital for any kind of rental property.

When renting to students, look for a policy that includes: 

• Unoccupancy cover, for when your student tenants are away from their courses during the summer or between terms

• Extended damage cover, to include accidental damage

• Loss of rent cover

• Property owner’s liability cover


The pros and cons of becoming a student landlord

As with any kind of rental property, there are a host of pros and cons you should consider before investing in a student rental property:


Pros of student tenants

• A steady supply of tenants if you buy in the right area – 2.38million students were enrolled in higher education courses in 2019

• Strong rental yields – HMOs generally provide better yields than standard, single-tenancy properties

• Fewer void periods – students will generally commit to a property for the whole academic year and sometimes even longer


Cons of student tenants

• Increased wear and tear – HMOs and properties with more people living in them generally means you’ll have to repair and replace items like carpets and furnishings more often

• Additional costs to furnish – students usually require furnished properties, so that means some additional up-front expense

• Guarantors – as your student tenants don’t have an income or much of a credit history, you’ll need to ensure you have a guarantor in place for each one


Tips for being a student landlord

If you’re thinking of investing in a student rental property, these tips will help you establish if it’s the right market for you and help you become a good student landlord…


1. Invest in the right area

Investing in an area with high demand for student properties is key, so look for university towns and cities or areas with a good population of college students living away from home. Consider, however, how much purpose-built student accommodation there is in the area you’re looking to invest in.

Purpose-built student accommodation is a growing sector in major university towns and cities and is the biggest competition to you as a student landlord.


2. Work with a letting agent

The amount of legislation that comes with being a landlord is vast, and if you’re venturing into the student HMO sector, there’s even more to think about.

Consider using a letting agent to find your tenants and manage your student property – which will save you time and provide you with peace of mind that you’re fully compliant and won’t face any large fines or legal action.


3. Furnish, but don’t over-spend

The furnishings in your student rental property should be modern and functional, but as the wear and tear in a student property is likely to be more intense, don’t overspend on items like sofas and beds.


4. Think about modern students’ needs

Modern students require connectivity, so a fast broadband connection is essential for any rental property.

And in order to help your property stand out from the crowd even more, you could also consider including a music streaming or television subscription in your rent.