Becoming an LL for Student Lettings

gwernybwch

A few comments -
Natwest and Lloyds might both do BTL mortgages, but do they do BTL mortgages on HMO and Student tenants? Have a look at this thread for other potential HMO lenders -
https://forums.moneysavingexpert.com/discussion/3230680=
Others that might do HMO BTL with various clauses include; Skipton, Nottingham, Platform, National Counties, Yorkshire / Clydesdale Bank, Santander......but I suspect that they will want a min. of 25% deposit.

The houses that you are looking at might not be classified as a HMO now, but I'll guarantee if they are in a 'student area' they will be classified as one in not to distant future (the HMO licencing schemes are great income generators for cash strapped local authorities)

Renting houses based on inclusive of all utility bills is a pain. Stick to exclusive or water only.

If you can get a mortgage, start to read on the hassles of being a landlord and the additional costs of a rental business.

A rent of 1400GBP per calendar month on a £80k house? Are you looking for a silent investor? LOL!

If you need any specific advice feel free to drop me a PM.

Hope this helps.

cattie

Mark.Gates7 wrote: »

from my research local prices range from 250GBP upto and over 400GBP depending on the property and what is included on a room by room basis.

i look on the market and believe i can purchase a 3 or 4 bed house for less than 80K slap bang in the middle of the Student Accommodation hotspot. Market research tells me i can charge 300-400GBP a week inclusive of utility bills. now if i cut that in the middle at 350 across 4 rooms that is 1400GBP a Month.

Are you sure these are not monthly rents as I don't know any university students who can afford £300-£400 per week per room. Even in London, student lets don't command anywhere near that sort of rent. Unless it's in Belgravia of course.

Yorkie1

Hve you double checked that the area you have in mind, has not had an article 4 designation order placed on it by the council? This basically means a check on any more HMOs in the area, although I'm not entirely sure of the details.

cotleigh

We do quite a lot of student rental houses down in Kent, and make a lot of money from them.

Suggestions:

Don't offer "bills included" because you are asking for problems. If people know they aren't paying for what they use, some will take advantage, running the heating 24 hours, and then opening their window if its too hot, leave everything on all the time, tumble dry one garment at a time "because they want to wear it tonight" etc etc. Leaving you with huge bills to pay. We don't generally offer "bills included".

Get the students' parents to sign a guarantee, so if their kids don't pay their rent, or damage the place, you can chase them for the money. It is a lot easier to pursue a settled, usually middle-class, fairly well-off homeowner for money than a penniless 20 year old. We've found that the cliched opinion that "students will trash the place" actually almost never happens. Knowing that their mums and dads will be liable probably helps.

Make the house as "damage proof" as you can: we generally paint the whole place white, so repainting is easy and cheap, use laminate and tiled floors rather than carpets, so they can be mopped clean and you avoid arguments about who pays for stained / damaged carpets, leather sofas because they don't show stains from spilled drinks, still look good 5 years later, and pay someone to make built-in wardrobes, rather than having to keep replacing collapsing IKEA / MFI ones every few years. And buy a lot of quality secondhand ex-hotel and pub furniture that won't fall to pieces if roughly treated.

Just accept and factor in the cost of a good clean of the house each summer. The usual situation is that the outgoing tenants genuinely THINK that they have given the house enough of a clean-up, and its a waste of time debating what is and isn't "clean enough". What people think constitutes "clean" when they move in, and what they think is "clean" when they are leaving are two different things!

Mark.Gates7

cattie wrote: »

Are you sure these are not monthly rents as I don't know any university students who can afford £300-£400 per week per room. Even in London, student lets don't command anywhere near that sort of rent. Unless it's in Belgravia of course.

Sorry yes per month, total error on my part.

Mark.Gates7

cotleigh wrote: »

We do quite a lot of student rental houses down in Kent, and make a lot of money from them.

Suggestions:

Don't offer "bills included" because you are asking for problems. If people know they aren't paying for what they use, some will take advantage, running the heating 24 hours, and then opening their window if its too hot, leave everything on all the time, tumble dry one garment at a time "because they want to wear it tonight" etc etc. Leaving you with huge bills to pay. We don't generally offer "bills included".

Get the students' parents to sign a guarantee, so if their kids don't pay their rent, or damage the place, you can chase them for the money. It is a lot easier to pursue a settled, usually middle-class, fairly well-off homeowner for money than a penniless 20 year old. We've found that the cliched opinion that "students will trash the place" actually almost never happens. Knowing that their mums and dads will be liable probably helps.

Make the house as "damage proof" as you can: we generally paint the whole place white, so repainting is easy and cheap, use laminate and tiled floors rather than carpets, so they can be mopped clean and you avoid arguments about who pays for stained / damaged carpets, leather sofas because they don't show stains from spilled drinks, still look good 5 years later, and pay someone to make built-in wardrobes, rather than having to keep replacing collapsing IKEA / MFI ones every few years. And buy a lot of quality secondhand ex-hotel and pub furniture that won't fall to pieces if roughly treated.

Just accept and factor in the cost of a good clean of the house each summer. The usual situation is that the outgoing tenants genuinely THINK that they have given the house enough of a clean-up, and its a waste of time debating what is and isn't "clean enough". What people think constitutes "clean" when they move in, and what they think is "clean" when they are leaving are two different things!

Thank you so much, i really appreciate the time and thought you have put into that wonderful piece of advice.

Mark.Gates7

Yorkie1 wrote: »

Hve you double checked that the area you have in mind, has not had an article 4 designation order placed on it by the council? This basically means a check on any more HMOs in the area, although I'm not entirely sure of the details.

all i can comment on is that any property i do buy will not be classified as a HMO in accordance with the LA guidelines. i will look into this further if it would indeed still undergo stricter regulations falling outside of those guidelines.

for the future i will be looking at HMO's there in a 7 bed residence which caught my eye and would be great for 6 bed rooms and possibly converting the 7Th bedroom into a third bathroom, but i will look into that when the time requires it.

motherofstudents

I know there were a couple of guys in Salford who were converting the old terraced housing. They refurbished them to a very high spec, quite unusual for student lets but they said that they had very little damage. They used top quality fittings so nothing easily breakable.

They actually appeared on local tv and eventually were selling their properties to other landlords, all done up ready to rent. I can't remember the name of their company but I know they made a great success of it. I think the suggestions you had earlier (laminate flooring rather than carpets etc) was very sensible. Most of the students I know don't intentionally trash anything. They may have little accidents though.

Yorkie1

Mark.Gates7 wrote: »

all i can comment on is that any property i do buy will not be classified as a HMO in accordance with the LA guidelines. i will look into this further if it would indeed still undergo stricter regulations falling outside of those guidelines.

You still appear to be missing the point. As tbs624 posted earlier in the thread:

A property let to 3 or more Ts who form more than one household *will* be an HMO, albeit not a licensable one in some areas. You need to understand the difference between mandatory, slective and additional licensing.

What you are planning is an HMO, irrespective of whether it requires additional council licensing.

Where an article 4 designation applies, planning permission is required for a change of use from class C3 (standard residential dwelling) to C4 (Small HMOs) – these include self contained houses and flats shared by between 3 and 6 unrelated people.

So, you *will* require planning permission if the article 4 designation is in force. You should check this out first.

dimbo61

You need a gas safety certificate (current )to rent out any property. you should have an electrical safety certificate/installation certificate, EPC.
The property needs modern double glazing with Fire escape windows upstairs.
If a student is going to pay you £85/90 a week they will expect a modern efficient combi gas boiler and radiators in every bedroom. Laminate flooring,Modern furniture, smoke alarms mains wired, 3 double sockets in every bedroom. alarm system, parking/ garden. Wireless broadband , LCD TV , leather sofa,s , new kitchen with washing machine, tumble dryer, dish washer, large american fridge freezer, and nice new clean bathroom/s ( 1 if 4 students and 2 if 5 or more students) with large walk in showers, white suite.
Dont forget the landlord insurance, bank fees, mortgage set up costs, legals, surveys, ETC simples really.
As for the 7 bedroom property well if its got 3 storey then its defo HMO and need licence ( costs big money)
There are plenty of cheap rental properties available at the moment because a number of LL have gone bust !!!!
Many of the big companies are pouring money into building huge tower blocks of student accommodation ALL ENSUITE in many student towns/cities