Becoming an LL for Student Lettings

Owain_Moneysaver

What will happen during the summer?

- property vacant for 3 months
- property smartened up and you do weekly holiday lets in the summer (more work, but profitable) - only viable in a touristy area
- students pay a reduced rate to leave their stuff in the flat while they go away
- students rent for the full year - depends on the uni and if there is summer work for students whether this will happen - postgrads more likely to stay over summer

Dunroamin

Fuzzyness wrote: »

true. but damage needs repairing and hence issues with deposits/last months rent and all that. i lived with people who thought it was ok to not pay the last month's rent as a substitute for not getting their deposit back. depends on which uni city you're talking. likely to get less issues if its a uni where mummy and daddy are funding their little ones.

NOOOOOOOO!!!:eek::eek:

We thought like that when we went in for a student BTL in Bournemouth but the parents were a nightmare. They were fantastically well off by our standards but they objected when we kept part of the deposits for holes bashed in the walls and kicked in doors and expected us to keep a room vacant (with no rent paid) for one student who was locked up for dealing drugs from the house.

Coming from poor but honest, respectable working class backgrounds, my husband and I found the experience of the middle class parent at bay to be something of an eye opener.

One of them even threatened us with "sending the boys round" as "we know where you live"!:eek:

Never again.

tbs624

Owain_Moneysaver wrote: »

What will happen during the summer?

- property vacant for 3 months
- property smartened up and you do weekly holiday lets in the summer (more work, but profitable) - only viable in a touristy area
- students pay a reduced rate to leave their stuff in the flat while they go away
- students rent for the full year - depends on the uni and if there is summer work for students whether this will happen - postgrads more likely to stay over summer

Note the HMRC rules on holiday lets:

To make sure your property qualifies as a furnished holiday letting, it must be:

• in the UK or EEA
• furnished
• available for commercial letting to the public, as holiday accommodation, for at least 140 days a year (210 days for 2012-13)
• commercially let as holiday accommodation for at least 70 days a year (105 days for 2012-13) - the rent must be charged at market rate and not at cheap rates to friends and family
• a short term letting of no more than 31 days
  

My bolding

tbs624

dimbo61 wrote: »

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.

Would not supply TV or dishwasher and most students won't actually care whether their bathroom suite is white so long as everything works and its clean at the start.. Laminate flooring throughout can lead to complaints from neighbours, because of the lack of a measure of sound insulation from carpets, and the cheaper laminates are easily damaged. American FF? Standard separate fridge and freezer are fine. Tumble dryer a good idea to prevent too much steaming off of wet washing on radiators but conisder the costs of running it if you do choose to go down "bills included" route ( a couple of us have flagged up the very real drawbacks with that one)

OP - check with the local Unis/Colleges. Some will have specific safety requirements for PRS LLs to meet if you want to be able to advertise your property via their accommodations office - specifically smoke alarms and electrical safety certs - and you may be required to sign up to a Code of Conduct (usually one drawn up between Uni, local Council and local LL association.

Catspajamas

You need to look into the mortgage more I think...there are tons of providers but each have different and sometimes strict criteria. Most will also need you to have a certain level of income to cover rental voids and students aren't popular with a lot of lenders. Definitely speak to an IFA or at least to a bit of research. Quite a few lenders ask for asts and if the valuer thinks it appears to be an HMO (in regards to unrelated tenants rather than a family group) it would be classed as one regardless as to whether it needs a licence

tbs624

Catspajamas wrote: »

Definitely speak to an IFA or at least to a bit of research.

It's not an IFA that the OP needs , it's a whole of market mortgage broker.

Catspajamas wrote: »

if the valuer thinks it appears to be an HMO (in regards to unrelated tenants rather than a family group) it would be classed as one regardless as to whether it needs a licence

It's not whether a valuer thinks the property is an HMO - as previously stated, if let to 3 or more poeple who do not form a single household then the property * is * an HMO, courtesy of the Housing Act 2004 definitions.

cotleigh

dimbo61 wrote: »

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

We don't provide flatscreen TVs. Most landlords don't provide any TVs. What I do is look out for the really big 36 inch CRT TVs on Ebay. You can buy a big Toshiba telly that was the "flagship" model for £10 - £40 on there, and they last for years.

We focus on larger houses (6 beds +) because there are less of these around, and students usually like living in a big house with lots of their friends. The town where we are doing this (Canterbury) doesn't have much going on in terms of purpose-built private student accommodation. Although I wouldn't worry too much: the prices that they charge for rooms in these places are 1.5 - 2 times what we charge as rent. There will always be plenty of students unwilling to pay that much more.

The HMO modifications are not that onerous, especially if you are "doing up" a house anyway. £4K for the whole fire alarm/emergency lights stuff, fire doors throughout, maybe some overboarding with fire-resistant plasterboard to walls on the stairway, enough bathrooms, that's it really.

tbs624

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.
.

Yorkie1 has picked up on this bit, but in addition, you fully need to understand the *law* regarding HMOs. It is not "guidelines" from a Council which define HMOs, licensable or otherwise.

The definitions are provided by the Housing Act 2004 (see above) and if a local Council imposes Selective and/or Additional licensing it is not via a "guideline", with the implied suggestion that it may or may not be complied with by LLs. There is no "opt out"

cotleigh

dimbo61 wrote: »

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)

Two more points: we have NEVER splashed out on those huge "American" fridge/freezers. Why? I don't even have one of those in my own home! It is cheaper to buy two "standard" fridges for bigger houses, and better too, because if one fails, they are not totally without a fridge til its fixed.

And HMO licence fees are usually less than £500 per house. Canterbury charges £460 once every five years.

cotleigh

tbs624 wrote: »

Note the HMRC rules on holiday lets:

To make sure your property qualifies as a furnished holiday letting, it must be:

• in the UK or EEA
• furnished
• available for commercial letting to the public, as holiday accommodation, for at least 140 days a year (210 days for 2012-13)
• commercially let as holiday accommodation for at least 70 days a year (105 days for 2012-13) - the rent must be charged at market rate and not at cheap rates to friends and family
• a short term letting of no more than 31 days
  

My bolding

None of the above is actually relevant as to whether you can actually offer a house for summer holiday lets, though, is it?

The above "rules" relate to whether you can offset the running costs of the house against income for tax purposes.

These rules are basically designed to stop people who own a second holiday home mainly for their own personal use from treating it as a letting business unless it really is one.