Tagged: buy to let

Letting to Students

A guide to landlords looking at letting to students
Letting to Students

Letting to students

Letting to students is slightly different from a legal perspective than renting to other types of tenants such as families or professional working couples. If the house has 3 or more tenants forming more than 1 household (a household represents 1 or more members of the same family who live together) and these tenants share bathroom and kitchen facilities then the house is classed as a house of multiple occupancy or HMO for short.

Accommodation for students

Each year the influx of students to a region where there is a university provides a real boost to the local economy and generally speaking will keep businesses that earn their trade through students in good stead for the long term supplying steady demand, subject to competition of course. The demand for houses near a University or academic institute is usually high with existing student landlords, keen parents wanting to buy their children a student house and other potential landlords wanting to give student letting a go means that properties are don’t stay on the market for long.

The closer to an academic institute the property is the more expensive the property tends to be on a like for like basis. Of course properties near student bars and clubs will be popular as well and worth looking into.

Generally speaking the student letting market has been stronger these last few years compared to other areas of the residential investment market especially in cities like London.

The demand from students for accommodation isn’t necessarily greater than the supply of accommodation available everywhere though and Leeds Unipol believed that in 2012 there would be a surplus of approximately 3,800 bed spaces leaving many landlords with unfilled rooms or worse untenanted properties.

Universities themselves compete strongly in the student accommodation market and are constantly building new purpose built student blocks. Each time a block or group of blocks is completed their share in the market can increase by several hundred students and put a squeeze on the private rental sector for student accommodation.

Rolle College in Exmouth, Devon is a good example of where a University can remove a market in one swoop. The college use to be a teacher training college and was part of Plymouth University. In 2009 the University relocated the campus with some 3000 students and 400 staff to its main campus which is over 40 miles away and the consequences had both economic and social implications in Exmouth. Many of the student accommodation properties have since been rented out to other individuals or rented out fully but the student letting market ceased.

When looking for properties with the intention of letting to students it is worth spending a bit of time researching the current market for a target area and any future developments. The University website will usually have a section on accommodation and future developments which might be able to provide some invaluable information and local estate agents should be able to provide good advice but getting the advice from several estate agents will allow you to cross reference and paint a clearer picture. We should also point out that you will require HMO Landlord Insurance, a unique insurance specifically underwritten for student property lets and we recommend you also take into account insurance factors such as flood risk, crime rates or any history of subsidence when choosing a buy to let.

What facilities should be provided when letting to students

It’s difficult to give advice on what facilities should be provided that goes into enough depth covering what students require and the regulations and standards that need to be met by law. The best advice is to go online and look up the university or academic institute website and read through the pages on accommodation.

Many universities work with their local council and student guilds to offer accreditation schemes. These schemes aim to recognise a set of standards outlining key Landlord responsibilities offering students protection and Landlords clear guidance.
The relevant local council website should provide information on what they expect from landlords and legal requirements and be a good resource for contact numbers and further avenues.

It is also important to not just set out a student let that complies with laws and regulations but it should be designed with students in mind. The more attractive and accommodating to students the property is the easier it will be to let.

Students normally pack light so the property should be furnished, not extravagant but suitable for students to quickly settle in. Rooms should be equipped with a bed, wardrobe and desk. If the rooms are on several floors or the property has quite a few rooms then more than one bathroom should probably be provided if possible. Kitchen appliances are likely to get heavy use so cutting corners to save money using cheaper appliances could end up costing more in the long run. Are the fridges/ freezers big enough for the number of student tenants in the property?

What else are you going to offer student? are all bills inclusive of rent? Are you going to offer a wifi connection? (really is a must these days) Do you want to provide direct contact details?

For all the information available on HMO’s, regulations and practices there is an equal amount of resource provided to students offering advice on what to look for when searching for a student accommodation (NUS and university websites provide such information) and it is worth cross referencing to so that you can meet all regulations and legal regulations as well get a good idea of what students are looking for.

Letting a Property

Weighing up whether renting out a property offers a worthwhile return in investment
Is letting a property a worthwhile investment?

Letting a property can be a great investment but like all investments a fair bit of groundwork should be undertaken first before choosing a property. Of course this may not always be possible if you already own the property but this guide is for those who are actively seeking to buy with intentions of letting.
The saying fail to plan, plan to fail, although not strictly true for renting property given that many potential landlords have successfully purchased a property without doing prior research or even looking at the property first it is worth remembering that buying a property to let is an investment and a large investment at that, where a bit of groundwork can really help you avoid the pitfalls and maximise the potential return.

Is investing in property worth it?

Before purchasing a property it is worth considering alternative forms of investment and ultimately the return on investment you are likely to receive for any investment period. Many people look at buying properties when rates are low and the stock market is volatile but when you buy a property you are effectively tying up capital and the property could drop in value in the future. If there is another interested party i.e. a bank or building society their interest rates will change at some point and as others have found out in the past high mortgage rates on large loans can eventually outweigh the benefits of making the investment in the first place.
Alternative savings accounts, although offer very little return during periods of low rates at least they do still offer a return and there are many tax free savings options available on the market today which involve next to no effort compared to that of becoming a landlord.

Where are you willing to buy a property?

When deciding on whether you want to buy a property to rent there are a lot of variables that come into play like a jigsaw and by answering certain questions you will have a clearer picture of what is right for you.
How far are you willing to travel? If you plan to be a hands on landlord and deal directly with the tenants and any problems that may arise then how far do you want to be from the property. Once you know the demographic area you can then focus on the local property market for that region. Bringing in a letting agency to manage the property will allow you to widen your target area and they will be able to deal with matching up suitable tenants, handle any problems such as the boiler breaking down and some will be able to manage all aspects of letting a property. However as with all expertise and services they will charge and this will need to be accounted for when costing the investment.
Depending on an agencies involvement they could just be responsible for finding suitable tenants and collecting the rent but you still carry the responsibility for maintenance or resolving problems such as sourcing a plumber or electrician.
Property value is often affected by desirability at that point in time. Cheaper properties are normally located in less desirable areas but that’s not to say that it will stay less desirable. The villages where once younger generations could not wait to leave and head for the city are now seen as highly desirable and preferred by the same younger generation as an ideal place to raise a family away from pollution, traffic and other factors associated with living in a city.
If possible try to gain knowledge of the area and of any future developments, remember that some developments can have a positive impact on an area such as a new school or bypass and some can have a negative impact such as becoming a flood risk area. There are also factors that can affect the value of an individual property such as new buildings or homes being built in surrounding land which as a consequence affect the view or appeal or a property.
It is worth visiting several different estate agents as they should be able to tell you which areas are the most desirable and some have a database of tenants waiting to rent. You may be able to target specific areas or even streets that look to offer real value as a rental property, maximising your potential return.

The kind of tenants you want could impact the kind of property you buy

If your thinking of becoming a landlord then you may have already thought about the kind of tenants you would like. Obviously the location and size of the property are things that factor in to the attractiveness for potential tenants. What is access to local schools like? which are the best schools in the area? How near are public transport facilities? How far are you from main roads and motorways? What are the Crime rates like? If your targeting professional working couples or families think about their needs and which areas would suit them the most, if you are targeting students, how far are you from their college or university and which areas have public transport routes that run directly or near to their academic institute.
Different types of tenants may also have different requirements besides just location and local facilities. For example students may require a fully furnished property that they can move straight into and be setup ready to pursue their academic studies the following day bringing with them just a suitcase of personal possessions to make their temporary accommodation a home from home. Families or couples may have a lot of their own furniture and require an unfurnished property. They may also be looking for a long term rental agreement.

Other factors to consider

There are lots of things to factor in to determine whether an investment is likely to be profitable, some can be determined early on such as fixed rate mortgage repayments, landlord insurance and to some extent the cost of renovating a property to the standard you require for letting. There are however other factors to consider such as what if the property remains empty for a month or two, do you have a financial buffer to cover these circumstances.
Rental income is taxable and it is advisable to see a tax advisor to see how this affects your circumstances especially if you have other sources of income. Some costs can be put forward as expenses to offset against this including the tax advisors fees.
There may be times especially during a recession where tenants struggle to pay the rent, how understanding can you afford to be? Many insurance companies now offer rent guarantee insurance to protect you against tenants who fail to pay.
You may be lucky enough to know other people who rent out properties, what are their experiences both good and bad, what advice can they give you, the more people you know and can get advise from the better prepared you will be and determine whether being a landlord is right for you or not.

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What does landlord Insurance Cover

Keys next to signature signing
A guide for landlords

What is Landlord Insurance Cover

When letting a property there are slightly different risks an insurer needs to take into account and therefore, have produced a different insurance for rented property known commonly as Buy to Let Landlord Insurance. So what does landlord insurance cover? well in practice a buy to let landlord insurance policy is very similar to a standard household policy, the buildings are still covered against standard perils, you can still get contents insurance to cover furnishings as well as accidental damage and many of the wordings in the policy booklets will be the same.
There is however a few differences and these will be highlighted throughout this guide. The main difference is that the property is not owner occupied and is tenanted through which you are earning an income. Standard house hold properties are not written and rated to cater for this (letting a room out is different and normally catered for in a standard household policy). It should also include Landlords Legal Liability insurance to provide protection for Landlords as Property Owners for injury or damage to others including tenants as residents in the property.

What does landlord insurance cover

Single policies for property portfolios
An advantage to landlords who own more than one buy to let property is that many insurers now offer multi-property policies, which can combine their portfolio or properties onto just one insurance schedule (each property will usually have its own buildings sum insured and contents sum insured) and will have just one renewal date. Discounts are usually available as its not only keeps things simple for the landlord but also the insurer as there is less administration and therefore cost involved.

Landlords insurance cover for Contents
What is considered contents is usually slightly different than for a standard household policy. As the policy will only cover the contents that the Landlord has provided for the use of the tenant. For example carpets, White Kitchen goods and communal contents in hallways and vestibules. Contents are not normally covered in outbuildings and garages unless specifically requested. It is also worth remembering that landlords contents will only cover items and furnishings owned by the landlord and not any contents owned by the tenants, who will have to arrange their own contents insurance.

Loss of Rent Cover
A standard cover found in rented property insurance is ‘Loss of Rent’. This is very important and given that it is standard in most landlords policies these days you should not take out a policy that does not include this. Loss of rent covers landlords against expenses they incur should their property let become uninhabitable leading to finding and paying for alternative accommodation as well as any actual loss of rent itself during the period that the property is uninhabitable following the occurrence of an insured peril. Loss of rent is usually set as a percentage of the sum insured.

Rent Guarantee
Rent Guarantee Insurance will cover you against your tenant defaulting or failing to pay the rent. It isn’t normally standard on landlords insurance but may be available as a bolt on or as a separate insurance policy.

Should you require  let property insurance  then please consider Highhouse Insurance for a quote. We can provide you with a Let insurance policy covering most tenancy arrangements including HMO for all the usual perils that you and your lender will require. Our own Let policy is underwritten at Lloyds of London and we will be pleased to provide you with a free quotation.

Landlord Insurance

landlord insurance required for let properties
landlord Insurance from Highhouse

Coverholder at LLoyds

Why Choose Highhouse Landlord Insurance

  •  Instant no claims discount.
  •  Competitive rates.
  •  Have Multiple Properties on one landlord insurance policy.
  •  Underwritten at Lloyds of London.
  •  Speak directly to staff – No automated phone service.

Why Landlord Insurance

If you own a property that you rent out then you need a specific type of insurance. This is often referred to as Landlords Insurance or buy to let Insurance.

At Highhouse, our  Landlord insurance is available for most circumstances. From a standard terraced property rented out to working couples to a flat above a commercial property.

We can provide you with a Let insurance policy covering all the usual perils that you and your lender will require. Our own Let policy is underwritten at Lloyds of London and we will be pleased to provide you with a free quotation. We are used to dealing with landlords and all property types, we issue our own polices “in house” noting lenders interests if required and we can have you on cover, with the documents over to you, your solicitor or lender, in most cases on the same day.

Landlord Insurance Quotes from Highhouse

Our rates are very competitive against market leaders. Discounting is available for no claims history, renting multiple properties or taking out other policies through Highhouse. We also like to keep our premiums consistent when possible.

Highhouse are more than happy to provide a no obligation quote based on your exact needs. This would include all the cover you would expect from a standard landlords building insurance policy. By discussing your insurance needs directly with our staff and underwriters you will also have the advantage of tailoring the policy, asking questions you may have or discuss any future changes you may need to make to the policy in advance.

Covering a wide range of standard Landlord Insurance requirements including:

  • Landlords legal Liability upto £2,000,000 as standard

As the owner of the property and not the occupier our landlords legal liability will indemnify you for amounts you become legally liable to pay as damages for bodily injury or damage to property caused by an accident at the property insured upto £2,000,000 as standard.

  • Loss of rent

Cover for loss of rent due that you are unable to recover whilst the property cannot be lived following loss or damage covered under the insurance. This cover is for upto 20% of the sum insured for the property.

  • Temporary accommodation

We cover the additional costs of alternative accommodation, which you would have to pay for while the buildings cannot be lived in following loss or damage covered under this insurance upto 20% of the sum insured for the property.

Tailored Landlord Insurance quote from Highhouse

At Highhouse, we believe you should only pay for the level of cover needed. Highhouse bespoke insurance policies are designed to create an insurance policy using the highest level of cover at the most competitive rates.
If you would like a landlord building insurance quote then simply fill in a few basic details on our quote form (these are not instant quote forms). One of our friendly team will then call you to discuss your requirements. and make sure we offer a policy that prevents you from being overinsured or underinsured. We look forward to receiving your enquiry.

 

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HMO Insurance – HMO Landlord Insurance

Hmo Insurance- Shared House Insurance for homes in multiple occupation
Hmo Insurance- Shared House Insurance

Coverholder at LLoyds

Key HMO landlord insurance benefits

  • Instant no claims discount.
  • Competitive rates, only covering your needs.
  • Single or portfolio policies available.
  • Policies underwritten at Lloyds of London.
  • Speak directly to one of our advisers.
  • Option to pay by Direct Debit.

HMO Insurance

At Highhouse, we are able to provide shared house insurance or HMO insurance as defined by the Housing Act 2004. We can provide you with a HMO landlord insurance policy covering all the usual perils you and your lender will require. Our own let property policy is underwritten at Lloyds of London and we will be pleased to provide you with a free quotation. We are used to dealing with landlords and all property types, we issue our own polices “in house” noting lenders interests if required and we can have you on cover, with the documents over to you, your solicitor or lender, in most cases on the same day.

Once you become a client of Highhouse, making adjustments to your policy is simple and you will find it remarkably easy to reach us by phone where we pride ourselves on the speed we deal with all enquiries. We can insure single risks and add additional properties throughout the year to make an insurance portfolio with payments being calculated on a pro-rata basis. We accept payment by most major credit and debit cards, bank transfer or can arrange convenient monthly installments.

Under our facility, we are able to provide cover for most shared house insurance requirements, property types and methods of construction, why not give us a ring; we’ll be pleased to receive your enquiry.

What does HMO mean

HMO stands for House in Multiple Occupation and may also or Multiple Occupancy Homes. In April 2006 new legislation came into force, meaning that HMO licensing became necessary. Failure to obtain the correct HMO license can result in a fine of up to £20,000 and the implementation of the HMO licenses has helped to raise the standards of accommodation. This information is to be treated as a general guide only and the Local Authority should be contacted for more advice on licensing. It also needs to be made clear that the rules and regulations on HMO’s may vary between different Local Authorities.

HMO’s may be defined as follows;

  1. An entire house which is let to at least three tenants who form at least two household and who share either/or a kitchen, bathroom and toilet. A household is defined as the same family members who reside together, married or not, including relatives and half relatives and both adopted and fostered children.
  2. A house that has been converted into bedsits or other non-self-contained accommodation and which is let to at least three tenants who form at least two households and who share either/or a kitchen, bathroom and toilet.
  3. A building which has been converted entirely into self-contained flats if the conversion did not meet with the standards of the 1991 Building Regulations and more than one third of the flats are on short term tenancies.

With regard to the tenants occupying the building, there must be more than one household and a household is defined under the Housing Act 2004 as a single person, co-habiting couples of either the same or different sex or a family unit. We can still provide insurance for situations where only part of the building is currently let, this sometimes happens with refurbishments and it often takes a little time for tenants to move in. We can also provide cover if your property satisfies the definition in relation to at least one third of the property being a HMO, in some cases part of the building is owner occupied (sold on a lease) and the landlord may even live on the premises.

HMO Landlord Insurance

HMO Insurance is a specialist insurance policy designed to meet the requirements for that type of let property.

As HMO properties pose a higher insurance risk (because of the multiple tenants) the HMO landlord has different liabilities and obligations to a standard let property owner. HMO properties need extra protection with regards to fire safety due to an increased fire risk. Consequently certain fire precautions need to be adhered to, such as smoke detectors in every bedroom as well as in communal areas, a heat detector in the kitchen, annual gas safety checks and electric checks every five years. There must also be access to adequate cooking and washing facilities for the number of tenants in the property, as well as enough rubbish bins for the amount of tenants.

How to obtain a HMO Licence

To make an application for an HMO license it is necessary to contact the relevant local authority who will be able to provide you with the application form and will also be able to inform you of the rules in your area and answer any queries. The local authority will be able to give you information relating to the costs involved in the application process, which generally vary depending on type of HMO and the number of tenants in the property. The length of time that the application takes will, of course, depend on various factors, but, providing that the landlord has submitted a valid application, the HMO may continue to operate until a decision has been made by the local authority (including any time taken for appeals). A property inspection may need to be done before a license is granted. The license itself is usually held by the landlord but, if the landlord nominates another person such as a property manager or agent it may then be held by that person. One license is needed per property and it is non- transferable to another property, and the period that it covers is usually five years.

Obtaining HMO Insurance

It’s important when seeking HMO Landlord insurance that you inform the insurers that the property is multi tenured. If you simply request a buy to let quotation for a rented property without disclosing the fact that more than one tenant will be in situ, you may find your cover is compromised. By presenting the insurer with the full facts you will ensure that your HMO property is correctly insured including the necessary liability insurance.
Before operating an HMO, you will need to speak to your local authority who will provide you with the necessary license and alert you to any special requirements with regard to safety at the property.

What sets a HMO apart from other properties used say as holiday home accommodation is that the premises must be the occupant’s main place of residence or used by students during term time. For other uses allowable, you will need to refer to your HMO licence and disclose such usage to us at the time you request a quote.

We believe here at Highhouse you should only pay for the level of cover needed, our bespoke HMO insurance policies are designed to create an insurance policy using the highest level of cover at the most competitive rates.
If you would like a HMO insurance quote then simply fill in a few basic details on our quote form (these are not instant quote forms), we will then call you to discuss your requirements and make sure we offer a policy that prevents you from being overinsured or underinsured.

 

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