If you’re thinking of becoming a buy-to-let landlord, one of the key decisions you need to take right at the outset, and before you purchase any property, is defining the market you want to target. Will you be renting to young professionals, families or perhaps students?
Reasons for renting to student
Choosing to focus on the student rental market can be more profitable than other types of letting for three very good reasons:
- There is strong and consistent demand for accommodation in established university towns and cities.
- Students will typically commit for a minimum of 12 months’ accommodation, providing longer tenures and fewer/shorter void periods.
- Achievable yields can be considerably higher than with traditional lets.
Suitable student properties
Location is key for student accommodation. Any property situated near a university campus or facility, or near with a convenient bus, tram or train link nearby, will be extremely attractive to your prospective tenants. As a rule of thumb, properties should be within a 30-minute commute from campus. Local shops and amenities are also a bonus.
Most students will be looking for communal, shared housing, so a property with 3 or more bedrooms and communal areas (large kitchen/diner, TV room) will be particularly appealing for fellow students wishing to share a house. Extra bathrooms or WC are always a winner, as is a garden or some outdoor space.
Another important factor to bear in mind is that 82% of students consider the availability of fast broadband to be the ultimate deal clincher, according to a recent NUS (National Union of Students) survey.
Special considerations for the student market
You should be prepared for the fact that, due to their age and stage, students may not make the most careful tenants. It may be their first foray into the adult world, and responsible living may not come naturally to all. As a result, student property may suffer more wear and tear, meaning you may have to spend more on maintenance in between tenancies than you would with a traditional let. It may be wise to contact a building surveyor such as Alan Rance Surveyors to arrange a Home Condition Survey (HCS) which gives the buyer a report on the condition of the property using a simple 1, 2, 3 rating guide.
So that everyone knows where they stand, it’s a good idea to prepare an information pack to hand out at the beginning of each student tenancy. Spell out what is expected in terms of rules, e.g. rubbish collection, noise control and tenants’ responsibilities in maintaining the property.
It is also recommended that you seek a guarantor for each of your student tenants (typically a parent or guardian) so that your income is protected in the event of non-payment of rent. Ask your letting agent or solicitor for specific advice on how to implement this.
If more than 2 occupants share the property, HMO (Houses in Multiple Occupations) regulations will apply. More information about your legal obligations as an HMO landlord can be found here.
Student tenants typically expect to rent fully furnished accommodation. Furnishings don’t need to be at the luxury end; budget options are perfectly adequate as long as they will withstand the wear and tear mentioned above.
Furnishings you should provide include
- Household appliances – fridge, freezer, cooker, washing machine, vacuum cleaner, lawn mower where applicable
- Bedroom furniture – bed, wardrobe, desk, chair, carpet, curtains, lampshades
- Communal furniture – sofa/armchairs, coffee table, dining table and chairs, carpet, curtains, lampshades
Marketing your property
In order to be able to target the maximum number of student accommodation hunters, you will need to be in tune with their term time needs. University terms run from September through to June, and many students start house hunting from January onwards for letting contracts starting in August or September.
When you market your property, use the same methods as you would for non-student lets, including letting agents and online advertising. Universities have a list of approved accommodation rentals that they send out to students – it’s vital that you are building a good relationship with the Accommodation Officer and that your property is on the updated list.