With student accommodation always in demand, the decision to become a student landlord can be a highly profitable and stable source of income for the right person. However, there’s more to consider than just buying a property and letting it out, especially if you’re not using a letting agent. From deposits to household bills, nothing is quite the same with students as it is with long-term renters.
Bill agreements are one area to consider if you’re a first-time student landlord. You’ll need to decide before letting if you’d prefer to include bills within rent at a set rate, which bills you’d like to include, and how much you’ll charge. Alternatively, you can use a bill-splitting service to reduce the headache of portioning out utility bills or utility household bills for the year.
Read on to find out more about the differences between an inclusive rent agreement and a non-inclusive rent agreement, with advice to help you decide which method would work best for you.
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A guide to the meaning of an inclusive rent agreement, the benefits of offering one and what you should include.
Find out whether a non-inclusive rent agreement would be ideal for you, and the possible disadvantages of this option.
Read which option is more popular amongst students.
Find out how a bill-splitting service can help make your life as a landlord easier.
For many student landlords, inclusive rent agreements are a tried-and-true method they’ve always used – but that doesn’t necessarily mean it’s the only option out there. Nonetheless, many student accommodations opt for this form of all-inclusive rent through the academic year, both for ease of management and to try to ensure all bills are covered.
An inclusive rent agreement, as the name suggests, is inclusive of all utility bills as part of rental payments. This means students are paying up-front for energy bills, gas appliances, and sometimes the property’s TV licence as part of a regular amount each month or term. This kind of rental agreement is common in a shared house as well as student housing, and typically, as the landlord for shorthold tenancy, the bills will be in your name.
There are a several benefits to providing inclusive rent agreements. The first is that, for students, the idea of paying everything in one go is an appealing prospect. It’s easier to manage; there are no arguments about who pays what and they’re fully covered. As a landlord, the biggest benefit of an inclusive rental agreement is the fact that bills are covered by default. That means no refusals to pay or unexpected unpaid bills after students leave. You are therefore at less risk of an energy supplier contacting you if your student tenants don’t pay the bills.
Because inclusive agreements have the cost of all household bills rolled into them, they are more expensive as an up-front cost. This may put off a potential student tenant, but these agreements are so standard that they are often seen as the norm. However, it’s also worth noting that inclusive agreements give you less choice of energy suppliers and utility bill options, which means you may not be getting the best deal or service.
Alongside the rent and tenancy deposit, an inclusive rent agreement for a student house should include all bills for the household. That means gas, water, electricity, broadband and phone and a TV license. You could also consider including the cost of gardening, a cleaning service or a TV service such as Sky or Virgin, to make your property more appealing to students.
Students are exempt from paying council tax, so this doesn’t need to be included within their rent agreement. However, if you do rent out your property to other people outside of the academic year, you will need to pay council tax as a landlord.
You can read our full guide to student tenants and council tax here.
The flipside of inclusive rent agreements is a non-exclusive option. When you think of landlords, this is the traditional approach that many take – though it’s less common when it comes to acting as a student landlord. Depending on your circumstances and aims, choosing non-inclusive can be a viable alternative to an all-bills-included model.
Non-inclusive rental agreements consist of a tenancy in which rent and deposit are covered directly, and nothing else. All bill costs and management falls on your tenants, and what they need to cover can be stipulated within the tenancy agreement that they sign. This will usually include utility bills, TV licence, internet, and any other household costs.
The most significant benefit of non-inclusive rent agreements is that it makes your property appear cheaper to prospective tenants. Because bills aren’t included, the amount they pay up-front is less, which can be a benefit for many students – especially those supplementing student loans with jobs. These types of agreements also take the responsibility of bill payment off your hands, requiring your tenants to take responsibility.
Many student tenants seek out inclusive agreements because it allows them to pay everything up-front and forget about the costs, which may mean you miss out when you require your tenants to pay their bills. It’s also worth noting that, if your student tenants don’t cover their bills or fail to pay, this could cause problems for you further down the line, and even require you covering costs in the long-term.
Many students choose inclusive rental properties as their first choice – but that doesn’t mean it’s the only choice available to them. While there are certain benefits to inclusive rent agreements, students may end up paying more as a ‘cap’ for their utility bills than they use, which means they’re losing money.
For more information about your responsibilities as a landlord here.
If you’re considering going the non-inclusive route for your shared accommodation property, using a bill-splitting service is the ideal way to save yourself a headache. With bill-splitting services like Split the Bills, each tenant receives a bill for their share of household bills. On our website, 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. No chasing, no confusion and no complicated payment processes.
As a landlord, you can refer tenants to a bill-splitting service upon signing their tenancy and even receive a commission as a result. We offer a monthly commission on every property you refer, year on year. Our commissions are very generous and depend on the size of the property.
Take a look at what Split the Bills has to offer today to discover peace of mind for your non-inclusive student property.
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