Renting to millennials is a popular market, and both student and young professional properties can be great investments. However, there are pros and cons to renting to each type of tenant. This guide will explain the pros and cons of each, covering your obligations as a HMO landlord. This page will also provide guidance on choosing a bills agreement for students and young professionals.
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Read about your key responsibilities as a landlord of a HMO property.
We compare the pros and cons of renting to students and young professionals.
Find out what students often look for in a rental property.
Find out what young professionals prioritise when looking for a rental property.
Read about your options when making a bills agreement for your property.
When you rent out a property to young professionals, your property is classed as a HMO, meaning “house of multiple occupation”.
Landlords of HMO properties (student or professional) with five or more tenants, or two or more separate households living there, are legally required to obtain a HMO licence. Smaller HMOs also need a licence in some areas.
According to Shelter England, you are also responsible for making sure that:
If you are renting to students, you should be aware that full time students are exempt from council tax. You can read more about this in our guide to students and council tax.
There are benefits to renting to each of these types of tenants. Student houses are constantly in demand, and students often don’t require as many amenities. They also often cost less to furnish. When renting to young professionals, on the other hand, you likely have less of a risk of your property becoming damaged and your tenants are likely to stay for a longer period.
We’ve summarised the pros and cons of renting to each type of tenant below:
Renting to Students: Pros and Cons
|Higher rental yields.||At risk of property damage due to parties and social events.|
|Lower expectations regarding quality of furnishing.||Properties are usually expected to be furnished.|
|Properties are in high demand.||Risk of noise complaints.|
|Students often have guarantors who will ensure that rent is paid.||High competition as the market is so popular.|
Renting to Young Professionals: Pros and Cons
|Young professionals tend to be more house-proud, so your property is at less risk of damage.||Young professionals often expect higher quality furnishings and more amenities.|
|Young professionals are in employment and are likely to have a higher income than students, making them likely to pay rent on time.||Young professionals often move jobs frequently, which may mean they move out of properties frequently.|
|Young professional tenants are less likely to cause complaints from neighbours.||Young professionals are more likely to have children, causing potential mess and damage.|
Students and young professionals have one thing in common when it comes to what they look for in a property. Both types of tenant seem to prefer a location that is in reasonable travel distance to the city centre. A recent survey showed that UK millennials prefer city centre living, with the vast majority of millennials in the study stating that it was important to rent a property close to their work or university.
Students and young professionals often also prioritise the following when looking for a rental property:
Whilst students and young professionals have the above requirements in common, young professionals often also prioritise the following:
In summary, young professionals tend to be thinking more about a family and will put more consideration into the appearance of the property and the amount of space it offers.
A bills- inclusive offer allows landlords to include bills in with the rental fee per month, whereas a non-inclusive offer means tenants have to work out the cost of bills themselves.
You can read our guide to organising student housing bills for tenants here.
Most students and young professionals would rather get one set, inclusive fee for their rent each month, rather than having to budget separately for everything. If you are renting out a HMO property, inclusive bill agreements are even more popular with people. The modern HMO tenant is likely to have become accustomed to fixed contracts such as mobile phone contracts and Netflix subscriptions. They will therefore likely feel more comfortable with a fuss-free rent agreement.
However, an inclusive rent agreement can put more responsibility on your shoulders. If you don’t have time to manage these responsibilities, you may want to consider a non-inclusive rent agreement. Another alternative is to use a bill splitting service like Split the Bills to take some responsibilities off your hands.
With Split the Bills, you can select your chosen services to include as part of the rent to your tenants. We will provide you with one monthly itemised bill to clearly manage your utilities.
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