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Landlord to be - Student HMO advice please

4 replies

Summerglowing · 15/01/2025 14:15

Hi,

I would like to buy a 3/4 bed HMO in a student area. Rental is sought after so yield can be pretty good.

I will be buying with cash, I don't have a mortgage.

My questions are aimed at people with experience in student HMOs:

Would it be best to register as a company and own the house via the company?

What additional costs would a student HMO typically incur? - ball park - I realise this is variable.

Anything I may have missed, useful advice will be greatly appreciated!

OP posts:
MarSeaLane · 15/01/2025 14:29

Just coming with experience from the ‘other side’.
Having similar as my neighbour (used to house staff from a local business) and knowing the issues we have faced, please check the deeds on any property that you want to purchase to make sure you can do what you intend.

The property ( and all others in the development) has a restrictive covenant that only allows one family to live in the house, rather than individuals and limits car parking (one car only).
The house has four individual tenants, not a family and each with a car.

Letting agent didn’t do any due diligence before letting it, though actually looking at the situation of the house it is obvious the issues this would create.

It really has made life difficult for everyone.

Toddlerteaplease · 15/01/2025 17:36

Check the local council id not trying to get rid of student HMO's. I live in a student area. It's now full of huge blocks of student flats. As the council wants to discourage student houses.

JC03745 · 15/01/2025 18:39

Sorry, this is long, but hopefully some points are helpful.

DH and I have a property which is now rented to students. DH is more involvement around the legalities though, hence I don't know every, single detail.

-I agree with checking if there is even demand in your area. In ours, the uni has built a huge amount of student accommodation, so we almost didn't get it rented out this year.
-We enquired with local estate agents, but the uni have their own student association thing. They act as the estate agent, can organise plumbers/electricians etc and the fees were less than the estate agents. Another plus is that they inspect through the year, and if the property is left in a horrid state- the students don't get their degree! I don't know if all unis have this though?
-My understanding is that an HMO needs additional regulatory requirements and locks on each bedroom door. So each room is rented individually, whereas we have always rented to groups of friends- who sign1, single contract. Sometimes, the uni people have put groups together, but because they are renting as a group, not individual rooms, I 'think' some requirements around HMO's are different.
-Check the bedrooms and common area requirements in terms of size. We had a box room and a very large master, but the box room was too small to be classed as an adult bedroom. We moved the wall over and both rooms could be rented.
-Also check on minimum common area size. I 'think' this was a change in the council the house is in, not UK wide. We'd rented the property 4yrs, when they changed their requirements and said the common area was 1.5m2 too small! We'd either need to re-configure the bedrooms to make them smaller, to add more common area space, or add an extension! In the end, we added a conservatory, but it was a PITA and an expense we weren't planning on.
-Again, suddenly after 5yrs of renting, they changed the rules in terms of the kitchen. Each student needed their own kitchen cabinet, own fridge shelf and own freezer drawer! We managed to find a kitchen cabinet that reasonably matched the rest of the kitchen, but also had a buy an additional freezer- despite already having a very large fridge/freezer.
-We have to provide a bed, desk, chair, wardrobe, bedside table in each room. Divan type beds last longer than slatted/cheaper ones. Always provide mattress protectors. We also bought cork boards for each room. Prior to that, people would stick blue tak and things on the walls. The cork board helps prevent some of that.
-We don't provide a toaster, kettle, bed side lamps etc. Each item will require pat testing each year, which WE pay for, so try to minimise electricals unless required.

-Our contract includes a gardener. I'm yet to meet a group which would mow and manage the garden themselves!

Overall, its been a positive thing. Most groups have been ok. DH and I had done the property up to live in it ourselves, new bathroom/new kitchen etc which I think this helped. Due to changes in my work, we stayed living where we were though. If it started out run down and old- it would likely have been left in a much worse state than it currently is. Happy to answer any questions you have.

MN2025 · 15/01/2025 18:55

Summerglowing · 15/01/2025 14:15

Hi,

I would like to buy a 3/4 bed HMO in a student area. Rental is sought after so yield can be pretty good.

I will be buying with cash, I don't have a mortgage.

My questions are aimed at people with experience in student HMOs:

Would it be best to register as a company and own the house via the company?

What additional costs would a student HMO typically incur? - ball park - I realise this is variable.

Anything I may have missed, useful advice will be greatly appreciated!

I am a landlord and own a HMO property that has been let out to students previously - not any more though. When I purchased the property in 2011 it was already a HMO for students but over the years I moved away from this and decided to only allow professionals…. Too many complaints from neighbours about noise.

All my buy to let properties are purchased under my company anyway - and this one was the same.

In regard to additional cost, no real difference to a regular HMO as long as you get ‘respectful’ students in, and not those who want to turn your property into a nightclub every weekend!

You might want to supply desks /create a communal study and living area perhaps?

I put desks into the rooms - and left the living space as is - for students to come together in living room etc..

Always have a guarantor so if they can’t pay the rent for whatever reason then there is someone else can be held legally responsible.

I’m guessing you already know that you will have to register the property with the local council and comply with different regulations.

Fire extinguishers, fire doors, fire alarm….

Do you plan to employ a cleaner to clean the communal areas? I pay £20 an hour for mine and they do 2 hours a week in my HMO and then an extra 2 hours to clean individual rooms in between tenancies - You then would need to set them up as an employee - PAYE - unless you go through an agency, but this will be more expensive.

Insurance! insurance! Insurance!

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