Demand for some types of student accommodation in some areas, has never been stronger, with data from UCAS showing that acceptances for the 2023/24 academic year were 24% higher than their pre-pandemic level in 2019.
CBRE research shows that year-on-year applications from international students as a whole rose by two per cent in 2023/24, with a four per cent increase in non-EU students. And the Higher Education Policy Institute projects that an additional 358,000 university places overall will be needed by 2035.
Against this backdrop of rising demand from students, there is a continuing shortage of available accommodation for students. The CBRE has indicated that more HMOs are needed and that new Purpose-Built Student Accommodation (PBSA) development has fallen well behind target, with completions in 2023 at a record low and a shortfall last year of around 580,000 beds across the UK.
While supply and demand vary between cities, broadly speaking, there are potential opportunities for private landlords who want to invest in the student accommodation sector. Research from PWC shows that for the 2023/24 academic year, the lack of availability of PBSA accommodation was acute in some student cities, including Durham, Southampton, Glasgow, Bristol and Manchester.
Meanwhile, according to a Unipol/HEPI report, student rents increased by an average of 14.6% between 2021/22 and 2023/24.
The four university cities with the strongest rent growth were:
Glasgow 20.4%
Exeter 16.1%
Nottingham 15.5%
Leeds 14.7%
Please note that the majority of information in this guide is for England only. Wales and Scotland have their own lettings rules and regulations.
So, what kind of accommodation is needed and how can landlords best meet students’ expectations?
As standards have risen all across the rental sector – and particularly because of the surge in institutional investment in PBSA, private landlords have had to raise their game.
Today, as a landlord of a student property, you not only have to provide high-quality accommodation, and fast and robust internet services as well as other amenities, you also have to understand and meet your legal obligations and use best practice in looking after your student tenants. If you can get all your due diligence right – including understanding future demand and supply, then this market can offer a major investment opportunity.
This guide tells you what you need to know about letting to students in 2024 and beyond – and here’s a handy summary of the contents so you can skip ahead to anything that’s of particular interest:
• How will the Renters (Reform) Bill affect student lets?
• Are student properties a good investment?
• What kind of accommodation are students looking for?
• How to attract student tenants
• What legal requirements do student landlords need to comply with?
• Managing the student landlord relationship
• How to reduce damage to student properties
• Top tips for maximising your profits from student renting
• How to make sure you have the right student landlord insurance
• Student landlord insurance FAQs
One of the biggest concerns for landlords in England at the moment is the Renters (Reform) Bill, which was making its way through Parliament prior to the election being announced. However, although it will be on hold for now, it’s likely to make a come back as soon as a new government is in place.
And, it’s worth understanding because the current proposals will lead to one of the biggest shake-ups of tenancy agreements since the assured shorthold tenancy (AST) became the default tenancy in February 1997, which gave landlords the ability to regain possession of their property without having to state a reason - by issuing a Section 21.
Among the proposals as they currently stand, section 21 will be scrapped, taking with it:
• The AST and fixed-term agreements
• Landlords’ ability to evict a tenant without having to give a reason
• The accelerated possession procedure, which doesn’t require a court hearing
And, whoever gets into government, it’s likely that these changes will still take place.
For landlords of student properties, their rental cycle follows the academic year and most depend on being able to ask tenants to commit to a 12-month tenancy. So, when the draft Bill began its journey in the House of Commons, there were two key objections from student landlords:
Either of these scenarios would negatively affect the rental business model for student landlords. Unsurprisingly, there were objections from the sector, with many saying that if the Bill progressed as it stood, they would be forced to pull out of the student market.
The good news is that amendments have already been made to the Bill to account for the specific needs of student let landlords and give them back some security.
Hopefully when the new government is in place, they will honour these changes.
These are the amendments that have been made to date regarding student tenancies:
If the Bill passes, in the future, with these amendments in place, landlords of student lets will be able to:
• Requiring possession between 1 June and 30 September
• Giving tenants at least two months’ notice
In addition, with a ‘standard’ tenancy agreement, the proposal in the Bill is that tenants will not be able to give the new minimum required two months’ notice within the first four months of their tenancy. It is assumed the same will apply to student tenancies – and therefore any student landlord will also benefit from the security of a minimum six-month commitment from students, even if they don’t have a fixed-term agreement.
For more on the Renters (Reform) Bill, head to our comprehensive Renters (Reform) Bill hub for landlords.
If you’re in two minds about providing homes for students, here are several reasons why you might want to give it some serious consideration:
The student rental market isn’t typically subject to the same degree of fluctuation as the general housing market. With a steadily rising number of students enrolling in universities and colleges each year, demand for student lets tends to stay at a constant high. The caveat is that students do tend to prefer certain areas and even specific roads, so make sure you find out what those locations are and, since not all universities/colleges are popular and seeing rising demand, you must check out the future of education in an area before you invest.
Another big positive is the predictable rental cycle. Even though the academic year only runs from September to June/July, many students are keen to keen to stay on through the summer, either to continue with part-time jobs, stay with their friends or even carry on using study facilities. So it’s common for landlords to ask students to sign a 12-month agreement without a break clause.
If they’re graduating and leaving the area or they’ve decided to move somewhere else for the next academic year, they tend to give plenty of notice, so as a landlord you should be able to be confident of an ongoing 12-month cycle of tenancies. However, it’s still worth making sure you have back up funds, just in case things go unexpectedly wrong – the recent pandemic for example.
One of the biggest misconceptions around student lettings is that you risk not getting regular rental payments and will have to keep chasing up your tenants. In reality, as long as you set up the tenancy in the right way, student lets can be very financially reliable.
Firstly, you can make sure all the tenants sign one tenancy agreement, agreeing to be jointly and severally liable for the rent. That means, as a group, they’re obliged to pay you the total rent for the property every month, even if someone can’t pay their fair share or if one of the tenants has left.
And, secondly, it’s common for landlords to insist on students having a guarantor - usually a parent or guardian – who agrees to pay if the student defaults. Not only does that give you a financial back-up, but if students know their parents could have to pick up the bill for any damage, they tend to take care of the property! Find out more in our article, ‘What is a guarantor and who can be one?’
Student properties are often HMOs and you can earn more rental income by charging rent on a per-room basis. While the best HMO rents come from letting each room on a separate tenancy agreement with all bills included (a ‘standard’ HMO let), landlords tend to work out student house rents in a similar way, regardless of whether all the tenants are signing one AST.
Even though your maintenance and running costs tend to be higher for HMOs, you’ll generally benefit from higher rental yields and monthly profits than landlords of single-let properties.
There are two main types of property students tend to look for:
This is a hugely popular option among young undergraduates, who generally like to live with their friendship group in a relaxed and sociable ‘family’-style situation. Each student has their own bedroom – ideally a decent-sized double room – and then they share kitchen, living room and bathroom facilities.
This type of rental will almost certainly be classed as a House in Multiple Occupation (HMO), meaning you’ll have to comply with more legislation than you would for a single let - mainly around fire safety. It’s also increasingly likely that you’ll have to obtain a licence for the property. See our guide, ‘What is licensing? And do I need a landlord licence to let my property?’
HMOs are usually older properties – Victorian, Edwardian and 1930s – as they generally have larger rooms and offer the potential for more flexible layouts. So, if you’re planning to invest in this kind of student let, understand that you might have to invest some additional time and money in getting the property ready to rent. Our ‘Ultimate guide to preparing your property to let’ is packed with information.
Students in their final year, postgraduates and international students often prefer to have more private accommodation. And even many younger undergraduates are also attracted to the high standard of living offered by some of the newer, purpose-built blocks. These rental units tend to be en-suite rooms or bedsits in luxury city centre buildings, many of which come with on-site amenities, such as a coffee shop, gym and laundry facilities.
This is a great option if you want to be more of a hands-off landlord, as there is often a bespoke lettings and management company attached to the building that can handle everything for you – from furnishing and maintaining the property to a specific standard, to managing your student tenants.
However, letting a property through a third party doesn’t mean you won’t need to keep a constant eye on what’s happening with the let. Also bear in mind that you are still liable as a landlord to letting legally and safely, so do your due diligence and regular inspections.
There are three main sources of information about what students are looking for and what makes a property most attractive to them:
1. Specialist student/HMO letting agents
They will be able to tell you which type of properties let most quickly for the best rents and the top ‘wants’ tenants come to them with.
2. University accommodation offices
Ask if they can show you their own accommodation units, so you can see for yourself the minimum standard students will expect and find out what accommodation they are short of for which type of tenants.
3. Current online adverts for room and house shares
Look on portals like Rightmove and Spareroom to see what standard of accommodation other landlords are providing and also check out the ‘wanted’ adverts placed by students to find out what they need and want.
When you’re specifically targeting a student population, you’ve got to be much more precise about where your property is located than if you were advertising to the general rental market. Students want to be relatively close to their campus and have basic amenities nearby. And there will always be certain roads that are top of their wish lists, so find out what they are and aim to buy in those locations.
Although students used to want to live within easy striking distance of pubs and nightclubs, their priorities have changed over the years. Today’s more health-conscious students are likely to value being close to gyms, leisure centres and parks – but they also like to be on a regular bus route into the town or city centre.
So it’s vital you invest the time into properly researching the most desirable locations for students. If you get this wrong – even if you’re just a few streets out – you could end up with very few applicants and an investment that simply doesn’t work out.
Whatever type of property they choose to rent, students will expect good quality fittings and furnishings. Many will have spent their first year in modern accommodation provided by the university, and they’ll expect something just as good – if not better - when they move into their own place.
Choose hard-wearing, modern, sleek kitchen units and bathroom suites, with tiled floors (and walls in the case of the bathroom), that will be easy for the students to keep clean and looking good.
Appliance-wise, you should provide a dishwasher, a large fridge/freezer, microwave, washing machine and tumble-dryer, and the kitchen should be well-stocked with crockery, pots & pans, glassware, etc.
In their bedrooms, they’ll expect a double bed with a decent mattress, a wardrobe, drawers, bedside table – and ideally a desk and chair so they can study in peace. If you’re able to provide en-suites, you should be able to charge a higher rent for those rooms.
One thing to be particularly aware of is the minimum rooms sizes that were imposed in October 2018:
• Single-occupancy rooms must have a minimum floor area of 6.51 square metres
• Double rooms must have a minimum floor area of 10.22 square metres
• If any part of the room has a ceiling height of less than 1.5m, it should not be included in the measurement.
There should be space for a dining table and chairs in either the kitchen or living room, and make sure there are enough comfortable sofas and chairs to seat all the tenants at once, in case they want to watch the smart TV (that you’ve also provided) together.
Probably the most important amenity for students is high-speed WiFi – particularly now that remote learning and Zoom video calls have skyrocketed in popularity since the pandemic. Speak to your broadband supplier about how many people will be living in the property and make sure they’re able to provide a reliable service that allows all those individuals to be uploading, downloading or streaming at the same time.
Some agents and landlords even have an ‘emergency back-up’ in the form of mobile WiFi hotspots that can be delivered and turned on within a day. Remember if the student has deadlines to meet, the loss of internet can be disastrous for their studies and as a result very stressful.
Gardens, or any kind of outdoor space, are always a great selling point for any type of let, so get some sturdy garden furniture and make sure there’s a shed, garage or outbuilding where the tenants can securely store bikes and other leisure equipment.
The ‘Generation Z’ students are also very engaged with climate change issues and having an eco-friendly, energy efficient property is increasingly important to them. Take a look at our ‘Ultimate guide to having an eco friendly property’ for information and advice on how to make your property as green as possible.
Top tip: When you’re deciding on what property to buy and thinking about how to fit it out, a good question to ask yourself is: “Would I be happy for a child of mine to live here?”
Finding tenants for student lets differs from letting to ‘ordinary’ tenants in a number of ways. So let’s take a look at how to make sure students know about your property, and what you can do to make them want to move in!
Most towns and cities will have agents that specialise in student lets. If they have a full management service and you don’t want to be too hands-on, this could be an ideal option.
Another resource that many self-managing landlords use is the accommodation office at the university or college. Most will provide guidelines or codes of practice that landlords need to adhere to in order to be recommended to students and it’s well worth making sure you meet these requirements. The university should then be able to help you market your property to students – particularly those moving out of halls of residence - and they may have other useful advice and resources. Working with universities in this way and getting a reputation for being an excellent landlord should make it easier to re-let your property and may be less costly than finding tenants through letting agents.
In terms of online marketing, both agents and private university halls companies can advertise on major sites such as Rightmove, and then there are portals like Spareroom, where you can upload your own advert, stating that you have multiple rooms available for students. Find out more in our ultimate guide to rental property marketing.
There are a lot of student properties out there and competition for the best tenants can be fierce, so your advert really needs to stand out.
First of all, remember that students are looking for quality, modern accommodation, so have professional photographs taken to show off all the rooms at their best. And make the property look inviting by ‘dressing’ the rooms – put bedding on the beds, switch on some lamps, pop a bowl of fruit on the table and have a few plants around the place.
It’s important to know that if the property is being advertised as furnished, any furniture in the pictures should be the same or of a similar standard to the furniture you’ll be providing to the tenants. They also need to meet strict guidelines set out in the Furniture and Furnishings (Fire Safety) Regulations. If tenants are induced to rent a property by attractive furniture, but then find it’s not the same quality when they move in, this can be grounds for them to ‘unwind’ their tenancy under consumer legislation and reclaim any payments made.
Your advert should include at least six bullet points that really sell the property, so make sure you highlight the things that students are particularly looking for, such as:
If you’re using a specialist agent, they will be able to advise you on what level of rent they think will attract the best tenants as quickly as possible, while still giving you a competitive return. Although it might be tempting to go for the highest possible price – particularly if you’ve just renovated a new investment - remember that you only have a certain window of time for attracting student tenants.
Many students like to get their next year’s accommodation tied up before the summer and you don’t want to find your property still sitting on the market by the time August comes around, so be realistic and always fair to tenants. Our guide to contains lots of useful information about setting the rent to align with the market level.
Once you’ve had your first year of students, assuming they’re happy, they may want to stay on for another year. However, if they’re planning to move out, you could ask them to recommend the property to other students they know.
You could even offer them a financial incentive, which may be cheaper and quicker than advertising yourself or paying an agent to find new tenants.
In terms of your legal rights and responsibilities, letting to students is no different to letting the same property to other types of tenants – there are no additional ‘student-specific’ regulations. See our comprehensive guide: ‘Legislation for landlords: Everything you need to know’.
However, there are areas of the law that might be new to you if you haven’t let an HMO before.
The majority of student accommodation consists of HMOs. The Government in England defines a property as an HMO if there are three or more tenants, who form more than one household (i.e. they’re not related) and they share toilet, bathroom or kitchen facilities.
With HMOs, there are particular rules and regulations that relate to:
For information on all these, please refer to our ultimate guide to letting an HMO property.
The relationship between you and your student tenants is a fundamental part of being a good landlord and running a successful lettings business. And when you’re dealing with HMOs, this relationship becomes even more crucial – and it begins before your tenants move in.
It’s crucial that reference and right to rent checks are made on every tenant. They reassure you that the person you’re letting to is who they say they are and help mitigate against issues like anti-social behaviour and non-payment of rent.
On top of that, most buy to let and HMO specialist mortgage lenders make it a condition of the mortgage that tenants are referenced and credit checked, and landlords in England are legally required to carry out right to rent checks to make sure that tenants have the legal right to be in the UK. It may also be a condition of your landlord insurance policy. Find out more in our ultimate guide to right to rent checks.
When it comes to students, if you ask them to provide a guarantor (which is advisable, to protect you against rent arrears), you must reference check the guarantor in the same way as the tenant.
If you use an agent to find your student tenants, they should carry out these checks on your behalf. If you are handling the let yourself, there are plenty of private companies that offer professional referencing services, or you can carry out the tenant referencing checks yourself.
Like reference checks, tenancy agreements are fundamental to the rental process and key to a successful let.
A tenancy agreement – usually an assured shorthold tenancy (AST) - sets out the terms of the tenancy:
• Your rights and responsibilities as a landlord
• Their rights and responsibilities as a tenant
• The period of tenancy
• How much rent is payable and when
• How the agreement can be terminated by each party
When you have multiple tenants, you have two choices:
Importantly, when it’s an HMO, there are three key clauses you should include, but make sure you get any additional clauses added checked by a lettings expert. You cannot just create your own clauses and you should never use an agreement you’ve had in the past or someone else has shared with you as the rules change regularly.
You can find the latest version of the Government’s model tenancy agreement on the GOV.UK website. If you want to make any amendments or additions, it’s important to seek legal advice to make sure they are valid, enforceable and don’t breach any of the tenants’ rights.
Deposits for students are not dealt with any differently to normal deposits and they will need protecting in one of the government approved schemes such as our deposit protection partner, mydeposits, who is also powered by Total Property.
However, there are lots of differences between your average tenant and student tenants when it comes to who might pay the deposit and what you may need to claim for at the end of the tenancy, so mydeposits has created a specific article – Deposits for student lets – a landlord’s guide. You can also read our ultimate guide to tenancy deposit protection legislation.
You can also watch this video of Suzy Hershman, Resolution Department Lead at mydeposits, which is packed with tips to help you prevent issues requiring resolution at the end of a student tenancy.
It’s crucial that you, or your agent, conduct a thorough check-in with your tenants. This gives you the opportunity to talk them through the inventory and any other information they need to know – such as how to operate the heating and the most efficient settings for the washing machine.
Remember, this may be your tenants’ first time living independently, so it’s a good idea to give them practical advice on how to maintain the property, including things like how to change a lightbulb!
It’s helpful to provide a ‘welcome pack’ that your tenants can refer to throughout the tenancy. This should include:
Also, if you or the agent has ‘fair use’ clauses in the agreement, do explain what this means and why the clauses exist.
We’d also suggest the most important contact and fire safety information is clearly displayed on a notice board in the kitchen. Make sure the tenants all sign a copy of the inventory to confirm they agree with the details and description of the property contents, which should be in writing with accompanying photographs.
Although it may take you or the agent a little time to go through the inventory with them, it’s important to have a clear record of the condition of the property at the start of the tenancy that can be compared to the condition at check-out and used as evidence if you need to make any deductions from the tenants’ deposits.
Good communication is key to a successful tenancy and one of the most crucial elements of letting to students. For many, this will be their first foray into independent living, and with so little experience of the rental market, they may be very aware that someone might try and take advantage of them.
In this situation, having a landlord or agent that specialises in student lets can help them feel comfortable and build trust. You or your agent may sometimes feel more like a parent than a landlord, but the better a relationship you can foster with them, the more successful the tenancy is likely to be.
The best way to earn their trust is to be friendly, honest and open with them from the start. If there’s any aspect of the property that’s less than ideal, make sure you or the agent are upfront about it, and ask if there’s anything you can provide that would make them more comfortable – within reason!
Make sure you or your agent is clear on what is expected from them as tenants, but also that they know they can come to you/your agent at any time with questions or concerns.
Importantly, make sure you/your agent delivers on promises so the tenants know they can rely on you/the agent. Respond quickly to any queries and have issues fixed as soon as possible. If things are taking longer than expected to resolve, keep your tenants informed so they know they’re not being ignored and haven’t been forgotten.
Top tip: Start off on the right foot by having a little welcome gift for your student tenants when they move in - perhaps a mini-hamper or some wine to share. It’s also a good idea to supply them with a few basic cleaning products to help them keep the property looking good, such as stain remover and toilet cleaner.
As soon as your tenants give notice that they will be moving out, make sure they know what the check-out process will be, giving them plenty of time to prepare.
Remind them that the property is expected to be handed back to you in the same condition as it was when they moved in – with allowances for natural wear and tear. Make your tenants clear that it’s their responsibility to clean and tidy the property, including any appliances, before they move out and make sure they’ve complied with their maintenance responsibilities as outlined in the tenancy agreement – such as keeping the garden tidy. You (or your agent) should help the students prepare for check-out by giving them a cleaning checklist and reminding them that if there’s any confusion, they can refer back to the check-in . In our article on end of tenancy cleaning, we provide a cleaning checklist to help landlords and tenants avoid any disagreement at the end of the tenancy about cleaning.
Make sure you – or your agent - ask the tenants to be present for the check-out inspection, so they can answer any questions and agree any deposit deductions there and then. This mydeposits resolution case study on student damage and cleaning highlights the importance of maintaining good communication and carrying out mid-term inspections as the most effective way of managing issues as they occur.
When there are problems with a student tenancy, it’s often to do with anti-social behaviour. The most common complaints are about noise, but anti-social behaviour can also include things like refusal to empty bins, intruding on other people’s property or privacy, and abusive actions.
As the landlord of a student property, it’s a good idea to introduce yourself to the neighbours and let them know that they can contact you directly if they have any concerns or problems with your tenants.
You/or your agent should address any anti-social behaviour as soon as you are made aware of it. Provided you’re happy it’s safe to do so, arrange to visit your tenants in person to discuss the problem and remind them of their legal obligations under the terms of the tenancy agreement. Also remind them that if they breach their contract, you can evict them. If you have engaged an agent to do this for you – make sure they are monitoring the property and acting immediately if anyone complains.
Of course, it’s important to hear their side of the story as well but, ultimately, if there has been a complaint, it’s got to be taken seriously – not least because your reputation as a landlord is at stake. If you/your agent decide to take action against tenants because of persistent anti-social behaviour, you have a number of options.
One route is mediation, which can often be the best solution to diffuse any conflict and make sure the problem doesn’t escalate. The government-authorised Property Redress Scheme offers a tenancy mediation service for landlords. Or you could choose to evict your tenants.
If the initial fixed term of the tenancy agreement has expired or is within two months of expiring, you can serve a Section 21 notice giving them two months’ notice to leave. The other option is to use a Section 8 notice (Form 3), which can be issued at any point during the tenancy. You must state the ground(s) on which you are evicting the tenants and the minimum notice period will depend on the ground. For ground 7A (anti-social behaviour) you must give at least one month’s notice. Because you are required to follow a specific legal eviction process and getting any part of it wrong can delay or even invalidate the eviction, it’s advisable to take specialist advice.
Using a professional company to administer the eviction – such the Landlord Action, also powered by Total Property – will make sure things are done right and the tenants are removed from the property as quickly as possible. In the case of extreme anti-social behaviour and if you or anyone else feels threatened by the tenants, you can contact the police to deal with the situation right away.
Any HMO is likely to suffer more wear and tear than a single-let property, simply due to the number of unrelated occupants. If the tenants are young students – particularly if this is the first time they’ve lived independently, and they’re not used to managing and maintaining a home – there’s an even greater risk of damage to the property and contents.
Here, we look at the steps you can take to reduce the likelihood of damage and protect yourself financially.
Making the property attractive, comfortable and easy to keep clean should encourage your tenants to look after it.
Before your tenants move in, have an independent inventory clerk make a detailed inventory of all your fixtures, fittings, contents and décor, or engage your agent to do this for you. This should include photographs and comprehensive details about the condition of each item. Have all your tenants sign this inventory at check-in to verify the contents and make sure they understand that you expect the property to be returned at the end of the tenancy in the same condition – emphasising the kind of minor damage that will be accepted as natural wear and tear.
For more information, see our ultimate guide to a landlord inventory and schedule of condition.
When you or your agent check the tenants in, make sure clauses in the tenancy agreement that relate to minimising the risk of damage are highlighted.
Giving them clear guidelines - such as not putting nails in the walls and keeping the garden tidy – will help to make sure there is no ambiguity around what is permitted and what is not. Then provide some practical information on maintaining the property, such as:
A good agent should be doing all of this on your behalf.
In addition to checks at the beginning and end of a tenancy, you/your agent should arrange to make inspections of the property at regular intervals – we’d suggest at least once every three to six months for student tenants.
This will help make sure you pick up any maintenance and repair issues that the tenants might not have reported, which should help prevent serious damage over time. Pay particular attention to your property during the winter months and build relationships with reliable contractors that you know will respond quickly, especially if you have multiple properties.
You’ll also be able to judge how well the tenants are looking after their rented home and bring up anything you’d like them to do differently.
Importantly, take the opportunity to check that the students are happy living there and ask if there’s anything they need. This may be the first time they have lived independently, and you might find you need to make more suggestions and give more advice than you would with seasoned tenants.
It’s also important to check whether any new occupiers have moved in that you didn’t know about, such as a boyfriend/girlfriend of an existing tenant. Firstly, any new residents must be referenced and right to rent checks made to make sure they are not in the UK illegally. And, secondly, increasing the number of people living in the property can affect licensing:
In any of these cases, you as the landlord will be held liable, so it’s worth reinforcing to your tenants that they must communicate with you if they wish to have any new house sharers.
Write the frequency of these inspections into the tenancy agreement, including the amount of notice you will provide before arriving, which must be a minimum of 24 hours. Bear in mind that the tenants are within their rights to refuse entry, so it’s well worth making sure you maintain a good relationship with them, and they understand why inspections are important.
You can read more in our separate ultimate guide to inspecting your property.
Even if you’ve taken all possible precautions to minimise damage to your property, sometimes accidents do happen and we have seen thousands of instances where landlords would have been left out of pocket if they hadn’t had adequate landlord insurance cover in place. A specialised policy, like Total Landlord’s Premier policy, can cover you for both accidental damage and malicious damage, as well as loss of rent and the legal cost of any disputes.
Importantly, HMOs and the majority of student-occupied properties require a specialist policy that covers the increased risks. At Total Landlord, we recognise that some of the risks associated with student properties are no greater than a normal rental property, so we don’t differentiate against student tenants. Find out more about Total Landlord’s student landlord insurance. You will also find more information and student landlord insurance FAQs in the final section of this guide.
Maximising your rental profits is about three key things:
Many investors manage to buy a great property, refurbish it well and let it to reliable tenants – and then move on to the next project. They can take their eye off the financial ball and fail to carry out regular income and expenditure reviews. Most significantly, too many simply don’t properly consider tax-effective property ownership, meaning they end up giving away far more of their profits than necessary to HMRC.
For information on your tax obligations and some of the ways you can reduce your tax liability, head to our comprehensive guide to taxes for UK landlords.
Here, we take a look at how to maximise your letting profits by looking after your cash flow and expenses and managing your liabilities.
This is key to being able to complete accurate tax returns and take full advantage of the expense deductions and allowances you’re entitled to.
Because property tax is complicated, and especially if you have multiple properties, it’s worth considering using a bookkeeper or accountant to maintain your financial records on an ongoing basis. They will know exactly which expenses are tax-deductible and whether they are revenue or capital items – that’s whether they should be deducted from your rental profits or offset against your capital gains when you eventually sell or pass on the property.
Alternatively, if you have the time and inclination, there are some great software packages specifically designed for self-managing landlords that can help track not only your financial transactions, but also other information about your property/ies and tenants.
If you live a distance from your investment or work full time, you may prefer to let through an agent, who will find the tenants, collect the rent and handle tenant enquiries and small repairs. For more information and guidance, read our ultimate guide to choosing a letting agent.
A full-management service for HMOs is likely to cost around 15% plus VAT of the annual rent. If you have more than one property, you may be able to negotiate discount on the fees – some will let for 12%.
But if maximising rental income is a priority and you live close to your investment, you may prefer to manage it yourself. Obviously, your time has a value, but this is one way to keep your costs down and the more experience you get being an HMO landlord, the smoother things will run over time. However, in case problems occur when you can’t engage with your tenant – you are on holiday or sick – do make sure you have a back up plan for the property and tenants to be looked after. Find out more about how to successfully self-manage a rental property in ‘The ultimate landlord’s guide to rental property management’.
If you’re self-managing, consider joining the National Residential Landlords Association (NRLA), which offers a lot of administrative resources (including tenancy agreements), training and legal support to its members.
And if there’s a local landlord association, it’s worth joining that as well to help you stay up to date with what’s happening at a local council level and put you in touch with other student landlords. Our article contains lots more information on the benefits of joining a landlord association.
It’s important to recognise that if your rental income doesn’t increase in line with inflation, you will be making less profit in real terms, so you should always aim to make small annual increases to your tenants’ rent.
When it comes to student lets, where you may have a change of tenants each year, this can be relatively easy. However, even if you have the same tenants for two or three years, and they always pay on time and in full and don’t cause you any problems, you should still consider making annual rent increases to help protect your investment returns from being eroded due to inflation. Read ‘How to legally increase the rent to align with the market level’ for more guidance.
If you’re not able or don’t want to increase the rent, see if you can reduce your expenses, although this can be tricky.
Assuming you shopped around for the best prices from suppliers and tradesmen when you first let the property, there might not be much room for manoeuvre. And bear in mind that there is usually a trade-off between service/quality and price – you tend to get what you pay for!
Here are some tips for keeping your outgoings to a minimum:
Although tricky, ideally review deals with utility and service providers every six months.
Some may offer you a discount if you call and say you are reviewing your deal and need them to offer you the best one they can.
If you have a mortgage, it’s likely to be your biggest monthly outgoing. Even a small percentage reduction in the interest can make a significant difference to your profits, so it’s worth checking on the latest deals every six to twelve months. And if you haven’t remortgaged for several years and your property has gone up in value, you may be able to access better interest rates by refinancing at a lower loan to value.
If your student rental is an HMO, you will need a specialist mortgage. These mortgages have some key differences to standard buy to let mortgages, which may include:
If you do require an HMO mortgage, it’s highly advisable to use a specialist broker, who can help you navigate all the various restrictions and conditions to find a suitable lender and product.
Having your rental property standing empty is one of the biggest threats to your profits. Despite not having any rental income, you will still have regular costs to cover, such as mortgage payments and your landlord insurance premium – so it’s a double hit to your pocket.
The good news is that because the rental cycle for students generally follows the academic year and they rarely want to move during that time, it’s fairly straightforward to plan ahead.
Check around December/January whether your current tenants are planning to stay on. If not, list your property at the local university’s housing fair, which usually takes place in January, and make sure you have new tenants lined up well before the current students move out.
Top tip: Consider making it easy for tenants to manage their finances by giving them an all-inclusive rent package that includes utilities, WiFi and contents insurance, which is what most university halls offer.
No matter who your tenants are, every landlord needs landlord insurance. The type of policy will depend on your particular circumstances and there are specific risks associated with being a student/HMO landlord, so you will require a specialist product.
To read more about how to make sure you get the right cover for your student let, take a look at our separate article here.
Our own HMO and student landlord insurance can cover you against financial losses suffered in connection to an HMO rental property. It protects the building itself and risks such as injury or loss suffered by a tenant because of a fault with the building. Get a quote online, call us on 0800 634 3880 or email enquiries@totallandlordinsurance.co.uk and we’ll get right back to you.
Student and HMO landlord insurance is a specialist policy that covers you for the additional risks that come with letting to multiple unrelated tenants.
If you have a buy to let mortgage, your lender will require you to have buildings insurance. Although taking out further insurance is not required, it is highly advisable, to cover things like public liability, your property contents and damage by tenants.
And if you have an HMO or student property, you are unlikely to be covered by a standard landlord insurance policy, because of the additional risks. So it’s vital you discuss your type of let and tenants with your insurance provider, so they can make sure you have the correct specialist policy in case you need to make a claim. Be aware that not all providers will cover HMOs.
Student landlord insurance offers specialised cover for properties designated to be rented by students. It protects the building itself and numerous related risks, including injury or loss suffered by a tenant because of a fault with the building (liability insurance).
Some providers will greatly increase the premium for an HMO or other student property, even though some of the associated risks are no greater than for a single occupancy property.
At Total Landlord, we understand that not all student properties are the same, so we have negotiated preferential rates depending on how the facilities are shared - for example where the kitchen facilities are shared by all students and there is no cooking in the rooms.
Bear in mind that if you have more than one property, you may be able to keep your insurance costs to a minimum with portfolio landlord insurance. Contact us either online or by calling 0800 63 43 880 to find out more and discuss your requirements. And you can find out more in our ‘Ultimate guide to being a multi-property portfolio landlord’.
The cost will vary, depending on the provider and the extent of cover, but the premium may be higher than for ‘standard’ landlord insurance. Get a quote online, call us on 0800 634 3880 or email enquiries@totallandlordinsurance.co.uk and we’ll get right back to you.
Want a simple way to check you’ve done everything you need to do as a student landlord? Download our student letting checklist.
