Pro’s and Con’s when renting for students
With over 2 million students studying throughout the UK and Ireland, student rentals can be a lucrative option for many landlords. In this part of our of student landlord guide, we take you through the pros and pitfalls that student landlords typically face when renting for students
Student Rental Guides:
The Pros of Renting For Students
There’s a possibility to receive a higher return from your property when renting for students compared to renting to normal tenants. As a student landlord, you can rent out rooms individually and convert dining rooms or attic rooms into student bedrooms. If a property is occupied by 3 or more tenants, then this is referred to as a HMO (Houses in Multiple Occupations) and if you rent out individual rooms to 5 or more students, then a licence is required.
Although the rent on each room individually may appear low, returns from multiple students in a single property can be very lucrative.
Read more about HMO’s and your legal responsibilities
Less Demanding Tenants
Students, in general, tend to be less demanding in terms of what they expect and you don’t need to have the latest interior designs or furnishings. There’s a current trend with certain segments of the student market to go for high-end accommodation but these are still the minority. The majority of students are just looking for a safe, comfortable and affordable place to live.
Over the last few years, student numbers have been growing year on year creating a higher demand for student accommodation. Although COVID has created what could be considered a blip during 2020/21, demand is likely to pick back up meaning it’s a fairly safe investment providing you choose the right student accommodation in the correct location.
The student accommodation sector remains strong and is considerably less volatile than other areas of the property market. With increasing student numbers, the demand for student lettings is higher than ever. The standard need for a guarantor, often a parent, is another reason why student lettings remain secure. This predictable market is a great opportunity for potential student landlords to secure lucrative rental yields and a regular healthy income.
With student tenancies typically lasting 9-12 months and a new intake of students arriving each year the market is fairly predictable and can provide student landlords with some stability and the ability to plan ahead.
The Pitfalls of Renting For Students
Late Rental Payments
Students finances often come in the form of loans or grants which are sometimes received later than anticipated. As a student landlord, it’s best to provide some flexibility and anticipate for late payments without forcing students to pay additional charges.
One way to deter students who purposefully miss payments is by having guarantors in place.
Property Damage and Maintenance
For many students, this will be their first experience living independently. This often results in a higher workload for student landlords as students often misunderstand their own responsibilities as a tenant which can also increase the likelihood of damage occurring.
Having a security deposit in place is a good idea and also ensuring you have guarantors on the tenancy agreement.
To help the student understand their own responsibilities, it can be a good idea to provide a welcome pack. These can be used to set out clear rules and the responsibilities the student has as a tenant. Also proving useful contact numbers, bin collection dates, appliance instructions etc and anything else to aid in settling in can help in reducing workload.
It’s generally knowing that students like to have parties and can be loud. Although this is all part of the student experience, it can sometimes result in complaints from neighbours.
Ensure you have policies in the tenancy agreement which clearly outline specific times it’s expected any noise will be kept to a minimum and that respect is to be given to neighbours.
If you receive complaints from neighbours, give them your backing to speak with the students directly. You can also assure them that it’s not something you as the landlord will tolerate.
Quiet And Empty Periods
University courses typically run for 9 months of the year with breaks occurring at Christmas and during the summer months. As a student landlord, it’s best to make allowances for theses empty periods and ensure your insurance covers these times.
The summer months can be a great time to carry out any maintenance or property upgrades before the next intake of students.
Typically, students stay in halls of residence for their first year of university. They then move into private student lettings for the remainder of their course. During this period many students drop out of university for varying reasons, so it’s something which needs to be taken into account.
In certain towns and cities, student accommodation is becoming a saturated market. In some areas such as Manchester or Liverpool, many private student properties are lying dormant. With the arrival of PBSA’s (Purpose-Built Student Accommodation (PBSA) competition to find student rentals has become fierce.
The good news is PBSA’s don’t seem to be as popular as initially predicted and have become un-affordable for many students who are now opting for cheaper private student lettings.
A few things which can help your student property stand out are:
- Make it Affordable
- Ensure your property is comfortable to live in and secure
- Buy in locations with direct links to universities and easy access to supermarkets, cafes and bars
Last but not least, if you already own a student property or have a student room which your looking to rent out and want to reach a wide pool of students, you can place a free advert with us in 5 easy steps
If you have multiple student properties you wish to rent out then check out our flexible packages.
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