Student HMO: Top Tips for Landlords

In this complete and ultimate guide to HMO property, we give you the principles on of HMO property from A to Z.

Student HMOs are a wise investment decision for many landlords. While there are some disadvantages of letting to students, there are also significant gains.

In this article, we cover everything you need to know before investing in student HMOs:

Why Let to Students?

Students represent a large number of residents in the private rental sector. The Higher Education Statistics Agency (HESA) reported there were 2.34 million students in 2017/18. This includes graduate and post-graduate students, overseas students, and also part-time students. A significant number of these students are renting accommodation.

Reasons why to let your HMO to students:

  • Consistent demand – there will always be students in higher education, so you can expect a regular supply of tenants.
  • Students typically rent in one-year blocks – this will provide you a consistent income and guaranteed cash flow.
  • Minimal rental voids – most students pay upfront for a year, so even if they drop out of their course, you will not lose.

The Risks of Letting to Students

  • Students leave more mass after the contact is finished
  • Students expect furnished accommodation
  • More risk of anti-social behaviour
  • Requires more hands-on management

Finding Right Area Investment Property for Student Tenants

Look at rental yields for top university cities. Bradford offers excellent returns, with rental yields of around 10%. Sunderland and Liverpool are also well worth considering. Nottingham has a large student population – with two major universities in the city, so it also offers good returns.

Furnishing a Student Property

Student properties are usually let fully furnished. You will need to have:

  • Beds
  • Bedroom furniture
  • White goods
  • Seating like a sofa
  • Desks for each bedroom
  • Other miscellaneous items, such as coffee tables, a dining table, vacuum cleaner, bookcases, etc.
HMO Tenant Referencing

HMO Tenant Referencing

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Marketing Your Property to Students

Marketing your property to students is the same as any other type of tenant. Students will scroll through sites like Rightmove and Zoopla when they are looking for a suitable property.

Universities send out lists of approved HMOs and other rental properties to new and existing students. Make sure your HMO is on this list.

Social media is a useful marketing tool. Encourage existing students to share with their friends about available properties.

Student Tenancy Agreements

Landlords are commonly providing a joint tenancy agreement. This means if one student doesn’t pay the rent, their housemates are responsible for the costs. The same happens if one student leaves the property early – it is up to the remaining tenants to find someone to fill the gap or cover the costs.

Mortgage and Insurance

Don’t forget to inform your mortgage lender that you planing to let to students, just in case they have any clauses that say: “no students”.

Also, inform your landlord insurance provider. You may need to take out a specialist policy. If you fail to do so, you may not be covered in the event you need to make a claim.

Student Council Tax

The good news is that if you let to students you don’t need council tax. The disadvantage is that you may need to prove you have student tenants. Otherwise, the council might decide to charge you full whack, which would be an unpleasant surprise at year-end.

We hope this has helped you decide whether you want to become a student HMO landlord. If you think we’ve not covered something important, please let us know and leave a comment!


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