Students tenants are often seen as high risk, given student generally lack credit history, have lack of income as well as the personal uncertainty for the students themselves that comes with living with flat mates for the first time. However, student accommodation is also a lucrative enterprise, it receives high demand, lets are usually for 9 months minimum, and it offers great return on investment.
As with other tenants, they key to successfully letting property is how the tenants are managed, and the principles of tenant management are universal. The following 5 points provide a guide for property managers working in student accommodation to help them get the most out of the lets:
1. Finding the right tenants
Just as with other tenants, getting good student tenants will make your as a property manager life easier. You can request references from your prospective tenants’ previous landlords, and even run a simple credit check on them or their guarantors to ensure there are no immediate red flags.
One of the most important issues when dealing with student tenants is getting guarantors. Given the unpredictable nature of student tenants, insisting on a guarantor should be a given. In the case of a “joint and several liability” contract, a tenancy agreement between multiple occupants, this ensures the rent is paid even if one of the student tenant leaves. Joint and several liability covers the tenancy as a whole, so if one student and their guarantor are unable to pay, the other guarantors are required to make up the difference.
3. Good communication
Once the guarantors are in place and the contract has been signed, the importance of good communication cannot be overstated. Ensuring students know when their rent is due is obviously important, but it is also a good idea if the bills are not included in the agreement to remind students of this. It is not just a one-way channel of communication; it’s important for students to know who to contact in case there is a problem. With property management software, this managed on a platform, so tenants know that they can contact the property manager on the portal. Software also allows for the storage of commonly requested information, like spare keys, or where to turn on the gas etc. saving the property managers the trouble of having to communicate this separately.
4. HMO licensing
HMOs require special licences, so make sure you get the proper registration, and do all necessary checks, for example electrical safety certificates that will need to be obtained. HMO owners who register face heavy fines, and could also see any eviction orders invalidated if they don’t have the proper registration.
5. Modernise the house
For property managers wanting to attract higher rents, they should modernize the property and make it as attractive a living space as possible. That includes providing nice basic furnishings, as well as higher amenities, such as televisions and even cable and internet subscriptions. Depending on the property, this could attract students with higher disposable income, and therefore maximise rental income.
As with any tenancy, there are pros and cons of renting out any space to anyone, and students are no different. Students have high turnover and have low credit ratings, however, in areas with high demand, students can provide letting agents with considerable income. Good management is essential, and property management software can make this task easier by connecting the stakeholders and providing a clear set of procedures for them to follow.
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