As long as you’re up to speed on guarantors and advance payments, renting to international students should be a piece of cake.
Each year, a wave of international students flocks to the UK’s higher education institutions at the beginning of autumn. This might have you thinking: is it worth opening up my property to this demographic?
The simple answer is: absolutely. Student rentals have proven to be quite the golden opportunity for landlords, thanks to the steady demand and increased profitability.
That being said, many landlords still have reservations about renting to international students, mainly due to concerns about their thin credit history. So, let’s dive into ways you can ease these worries and handle student rentals like a pro.
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Find Out MoreRenting to international students with guarantors
One of the tried-and-true ways to make sure your student tenants stay on top of their rent payments is by having them set up a guarantor.
So, if this is the route you’re going with for your student-friendly property, here are a few pointers to consider for a smooth process.
The Guarantor Advantage: For students who haven’t rented in the UK before, having a guarantor is like having a financial safety net. Usually, it’s UK-based family members who step up as guarantors – they promise to cover the rent if your student tenant misses out.
Transparent Tenant Communication: Right from the start, it’s best to communicate the role of guarantors clearly to any prospective student tenants. Since a lot of international students might not be familiar, break down your expectations, their responsibilities, as well as how this whole setup guarantees that the rent will be paid without any worries.
Thorough Referencing: When you’re sizing up potential guarantors, just make sure they tick the same financial boxes you’d look for in any other tenant. This step is particularly important because it’s what makes sure the guarantor is ready to back up their promise without a hitch.
Renting to international students without guarantors
If a student can’t find a UK-based guarantor to get things rolling with the tenancy, that doesn’t mean you should outright turn them down – especially if you think they’d make a good tenant.
Adapt and Thrive with Advance Payments: Relying only on a guarantor isn’t the be-all and end-all for student rentals. You have another choice: you can request an upfront payment, usually for about three to six months’ rent. It’s like having a backup plan that gives you a similar level of financial confidence.
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University Guarantor Programmes: Some universities now allow students to act as guarantors on their behalf, if they can’t find one for themselves. Students pay a fee for this service, and if rent payment becomes an issue, the university will have your back and will take care of it.
Rent Insurance and International Students: Certain Rent Guarantee Insurance (RGI) policies and deposit replacement schemes demand that all tenants pass referencing (often a challenge for international students) or have a guarantor fulfil this requirement. This means that if you’re already subscribing to an insurance scheme it might not help cover any rent loss if your student tenant falls behind.
Get an in-depth overview of student tenants and their guarantors.
Order Tenant ReferencingRenting to international students in the UK holds a lot of potential for landlords seeking to elevate their property portfolios. But, of course, it doesn’t come without its risks.
Whether you’re working with guarantors or considering other options, ultimately the trick is finding that sweet spot between making good returns and keeping your tenants happy.
By adopting methods that resonate with this dynamic demographic, you’re well on your way to forging strong relationships, maintaining high occupancy rates, and making the most of the student rental market.
And you need to consider HMO
OpenRent makes it difficult to rent to international tenants, by requiring a UK debit/credit card for the deposit. How will someone have that if they just arrived in the UK? Any bank card should be accepted
Maybe in their first year, but not the rest of time. A lot of the richer ones can get U.K. debit cards eg HK students use HSBC who will do this, so it acts as a kind of filter