Would you rent your first BTL property out to students?

Would you rent your first BTL property out to students?

13:17 PM, 3rd January 2015, About 7 years ago 16

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I am about to buy my first Buy to Let and I was thinking that it will be good to rent out to students by the room as it might end up paying me well, no council tax to pay and renting by the room sometimes means that the house is never empty (always having a tenant) and I might never have to renovate the entire house at one time.

Its a three bedroom with a living room, I could even convert the living room into a big room and rent that out as well. It has two toilets so it will be two to one.

Please, what are the ups and downs of renting to students?

Many thanks for your help!

MMCyoung



Comments

by Barry Fitzpatrick

20:18 PM, 5th January 2015, About 7 years ago

@MMC

No problem, I am happy to share my experience. But there are a lot more subtly to these broad brush strokes as well . A good letting agent will help you avoid the worst pitfalls.

by Simon M

22:32 PM, 6th January 2015, About 7 years ago

Answer to your question: I did my first BTL to students - I had left uni 5 years earlier so knew what to expect and it wasn't too difficult at first. However, life moves on, I moved away for a better job, married and then we had a bad set of tenants and had a similar experience to some others quoted here - the hours to clear the beer cans & bottles from the cellar was one of the easiest tasks. We sorted out the damage and then had another set of student tenants mess us around. At this point I'd had enough and sold. With hindsight, I should have considered a local letting agent and paying for a tradesman to do every job needed but although allowable you have to recognise it's no longer a higher return.

20 years later I pay an agent to manage a small portfolio and I can continue to be fully-committed to a demanding day job, whilst receiving some decent extra income with little effort and can look forward to retiring early. I know an experienced full-time landlord with a good portfolio can make a decent return from letting to students. I learned a lot from my student BTL, but before starting BTL again I investigated a lot more thoroughly and for many months. Would I advise anyone start their first BTL with students? No. Think really hard.

by MyMini Crib

19:57 PM, 7th January 2015, About 7 years ago

That's a very good answer Simon,

I will look into getting an agent with more experience to manage the property.

Thank you.

by Robert Desbruslais

8:45 AM, 10th January 2015, About 7 years ago

As a surveyor who used to value student let's (we now only do condition surveys) in my experience there are two main considerations. Firstly, it sounds to me like you could be creating an HMO, ie house in multiple occupation. This will be subject to licensing by the council and they will impose certain standards.

Secondly, virtually every property I saw (in Brighton) had to be redecorated and re-carpeted annually as they were completely trashed. This included girl only houses. Obviously there were exceptions but you need to budget for this and potential damage repairs during the year. Students are skint and therefore tend to party at home a lot instead of going out. For most of them it is the first time away from their parents and they have no-one telling them what to do.

On the positive side, usually the lets were 12 months with good yield and the deposits contributed to the cost of the works required at the end of the term.

by ED SHIRMAN

10:20 AM, 10th January 2015, About 7 years ago

Reply to the comment left by "MyMini Crib" at "03/01/2015 - 21:09":

Hi , i have been renting to students for about 13 years . The return is better than standard residential but so are the costs .
Do your sums ,and ask questions .
Is the house in what the uni calls , the golden triangle where the students wan to be ?
What is the going rate per room ?
What is the shortfall the uni has between their own rooms and number of students
Are you equipped to trying to get student tenants your self - where to advertise , interview , references .
Are you better using an agent and at what cost ?
Are you set up to handle maintenance issues or do you need an agent here too .
A member mentioned mortgages and who will lend if students - you havent said you need a mortgage .
Are there HMO regs you need to watch for a house with 4 students - what are the minimum requirement s for common /lounge space - you may not be able to use the lounge without splitting it - and then will it be big enough as a lounge re the regs ?
All insurers dont cover student let - direct line will not .
Back to square one - do your sums and see the difference between students and residential - and then decide if the difference is worth going into all these points .
Dont be emotional about what the students might or might not do - look at the figures and consider the hassle - and what your objective is as an investment .
I hope this helps - the student market is gettiing harder - both with regs and non paying students - i am adjusting my portfolio because of this - less return but less hassle .
Good luck and i am happy to answer any questions you may have .

Back to square one - do your sums and see

by Steve Hards

13:18 PM, 10th January 2015, About 7 years ago

I agree with Robert Desbruslais - watch out for getting into HMO territory if you go down the route of letting each room on separate tenancies. Not only will it involve extra costs for registration and to meet the standards but you will - I'm pretty sure from memory - be responsible for the council tax which means that you will have to include it in the rent and the students won't be able to claim exemption.


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