Student House - Legalities etc.

peterc2609

Hi,

Just a quick bit of info.

Ive been speaking to some students recently who will be renting a house shortly for a year, at a cost of £300 a month each (4 of them) thats £1200. The same house would be rented to a family for around £450 a month.

Seems like quite a good business to be in.

What are the legalities surrounding renting a house to students? Any pitfalls etc?

silvercar

You need to be far more hands-on with student lets. Higher annual refurb costs, less capable tenants, more mess....

You also need to be in the centre of a student area. Students all want to live near each other. Lets tend to be from one summer to the next, so if you haven't got tenants booked by about now for next september you could find yourself empty for a year.

Legally the house would be an HMO with more than 2 students, so you need to comply with all that legislation.

phlash

See here before you buy....(!)

http://forums.moneysavingexpert.com/showthread.html?t=2287701&highlight=

You will need planning permission if you buy a residential house, in many areas this will not be forthcoming. These laws have just handed a monopoly to current student Landlords, whose property values will now increase due to a restricted market.

Lokolo

Trust me on this, students are a mess. The amount of times I have to clean after people.

Also rent isn't always paid on time depends on the time of year (example of xmas, last legs of student loan + presents to buy, no more loan until Jan). My landlord does it in blocks, Sep -> Jan -> April. Makes it a lot easier.

However, I know if you get good students you can get a good 2 years rent sorted.

peterc2609

The hands on part - no issue, higher refurb costs- no issue, more mess etc - no issue.

I haven't even bought a house for this purpose yet, but if I decided to.

Can any property apply for a HMO, or does it need to be a certain size.

Its a long term plan.

Would I need to buy the house, get it ready, then apply for permission?

Can I buy a property that already has the permission in place?

phlash

You can buy an existing HMO - but like I said, it will cost you £££'s.

I believe, although the legislation is not finalised until mid-march, that like with most planning applications you can apply without actually owning the property.

There are space allocations for HMO's etc which can be found online.

princeofpounds

Often rent is not paid over the summer period either, or a half-rent retainer. So figures you hear might not be the annual equivalent.

The main issues you will have are the students are more mobile, sometimes more messy (not always true), not earning proper incomes and sometimes involve HMO regulation (which actually varies from region to region)

ceh209

I agree on the HMO regs - I was a student in Exeter recently and there it's an HMO if there's 5 or more students AND the property has 3 or more floors. You need to find out what applies to your local area.

I always had to provide a guarantor (i.e. my dad) when renting a student house aswell - probably something to consider for when the student loans company mess up their payments again!

phlash

ceh209 wrote: »

I agree on the HMO regs - I was a student in Exeter recently and there it's an HMO if there's 5 or more students AND the property has 3 or more floors. You need to find out what applies to your local area.

I always had to provide a guarantor (i.e. my dad) when renting a student house aswell - probably something to consider for when the student loans company mess up their payments again!

CEH is refering to compulsory licencing for 5 bed 3 storey HMO's.

An HMO is actually a dwelling with three or more unrelated parties sharing a kitchen / toilet etc as defined in the 2004 Housing Act.

On 19 April this year, local councils will have local powers to licence the smaller HMO's, not just the 5 bed 3 storey ones.

In addition, on 6 April, the new 'use class' C4 category comes into force, which will require planning permission. - No doubt about it, this will be the biggest hurdle, and what my link above refers to.

mlz1413

If you rent to students ensure that:

you have linked smoke alarms wired to the mains (not batteries that can be removed)

you have a maintenance free garden

a basic bath panel that can replaced and doesn't get discontinued.

good kitchen cupboards that will take new doors, cheap kitchens have rubbish carcasses that are ruined the moment the door is loose.

Patterned carpets that hide stains or be prepared to replace (bi)yearly.

You keep a key to the window locks.

Everything is magnolia.

Many students move in as 3 friends and then fall out so be careful with deposits and how the AST is written up.

Students do not pay C Tax but you need to inform the council who is living there.

Students will also want Broadband connection so ensure how the bill is paid.

olly300

mlz1413 wrote: »

Students do not pay C Tax but you need to inform the council who is living there.

It's the students who need to prove that they are not eligible to pay council tax not the landlord.