Letting property to students can be a profitable business venture, but you will want to be aware of some of the hazards as well as the benefits. The following is a helpful guide for investors, homeowners or landlords on how to let a property to students.
In recent years, the number of students in the UK has increased dramatically. As the government’s goal of pursuing 17 to 30 year olds into higher learning, these numbers will continue to grow.
The guide lays out the pros and cons when letting to students, and you can survey the synopsis to see if it’s something you would consider doing.
The Condition of the Market
The rise in student numbers has primarily been due to government efforts to encourage students to learn. There’s also been an increase in foreign students at UK universities over the past ten years, and this trend is anticipated to continue.
Advantages and Disadvantages
Student lodging doesn’t need to be top of the line. Properties that are older and have a number of rooms make the perfect setting.
Students don’t mind sharing space, and they can fit quite a few tenants into a dwelling. This can make the property quite profitable.
If you are in close proximity to the university, you may have an easier time of finding students to let your property to.
The demand has been increasingly greater than the supply in recent years, so rents are continuously on the rise.
Students come and go, so you won’t have to make any long-term commitments.
Student lodging garners lower appreciation than other types of dwellings.
The increase in privately built accommodations to finance university halls is cutting into the business of private lettings.
Maintenance expenses will typically be higher than normal, but you don’t need to furnish the place with high end décor.
It’s difficult for students to provide credit references.
You may have some tenant down time in the summer when students are home during summer vacations.
If your student tenants are boisterous and disorderly, you could face fines from your local authorities.
Things You Should Do
The following are some steps you can take to minimise your risks:
Take on students that the college has recommended for your property. If the students misbehave and cause trouble, the university could be in jeopardy.
Put together a packet of information when the students arrive. This could include tips on local amenities, responsibilities regarding noise, maintenance of the property and recycling.
Unless the student can give you detailed references like their banking history or employment verification, you may want to ask for a guarantor to be accountable for the tenant while they are on your premises.
Put together a contract and include a clause that states if one tenant departs the dwelling, the other parties that are left need to find a replacement. If they fail to do so, they will have to come up with the additional funds.
Make a detailed inventory of the condition of the property, and all of the items that are a part of the dwelling. They need to leave the property in good condition, or they will have to fix and repair any remaining items at their cost.
Where to Purchase?
Rental properties can vary from one part of the UK to the other. For Crewe, you can pay an average low of £39.33 and for London, you can pay an average high of £103.85
The higher number of students there are, and the lack of university lodging there is, the higher the cost of rent.
Property values are experiencing a period of volatility at present, so it’s hard to say what kind of profit these numbers are going to represent. Look at the area where you are thinking of purchasing a property, and you should compare the numbers. You can speak to the university lodging offices and get their future student figures, and the type of arrangements they expect.
When students are looking for accommodations, they typically look for something that is affordable and conveniently located to where they need to go. If you can price your property below what your competition is asking, you will be in demand. Students won’t mind compromising on certain things in order to stay within their budget.
Some of their priorities include:
Close proximity to the university and the other students. Find out where the most popular locations for the students are.
Close proximity to pubs, stores and transportation. Most students won’t have access to cars, and they figure that travelling too far on foot is unappealing. A location that is in the hub of student activity is the perfect location.
Clean, functional and orderly. Deluxe accommodations may make students wary, and they may think that they were overpaying for a property. Clean lodging with second hand furniture is more than suitable for their needs.
Most students are responsible and dependable when it comes to letting income. Since they have limited choices on their living arrangements, they make for a captive market. They are typically easygoing and open minded tenants, and there should be an increase in their numbers on an annual basis.