Advice on Student Lets
According to recent report by Property Partner, it’s possible to produce yields as high as 12 percent from letting property in student cities.
But despite lucrative returns and the guarantee that student digs will be in high demand for the foreseeable future as university admissions climb each year, landlords are still less than enthusiastic about letting to young adults in education.
So what’s the market and how can you make it work for you?
Best Spots for Student Lets
The data collected by Property Partner found Fife, home to the University of St Andrew’s, to be the most lucrative student hotspot. Other high-yielding buy-to-let student locations include Sunderland, Teesside and Birmingham.
Moreover, it probably comes as no surprise that due to higher property prices driving down rental return, university centres in the south of England provide landlords with yields as low as 3 percent. Southern cities such as London, Brighton, Reading and Oxford are often the least attractive to investors and landlords.
This analysis comes at a time when it has become imperative that private landlords increase yields to counteract taxes, stamp duty on second properties and the end of interest relief on mortgages.
Is your property suitable?
Although students aren’t typically picky about their environment or living standards, there are a few things that this demographic require from a property. Firstly, students usually come in groups but also need their own space so a moderately sized house with large communal spaces is essential. As a lot of students go home frequently, they are forced to live with fewer amenities and this means that landlords must often provide items like furniture and appliances .
What are the advantages ?
Students are generally easier to please, and only require the basic necessities in comparison to individual renters and families as it’s often their first experience of private rental and they’re usually more focused on studying and socialising.
Letting to students is a consistent source of income as the pool of tenants renews itself every year, as a result of this neither the renter nor the landlord is tied into long-term contracts.
Furthermore, it’s relatively easy to find tenants depending on the proximity of a property to a campus, with students often referring friends via word of mouth and student unions assisting house hunters.
As mentioned before students usually come in groups and rent is charged per room and therefore landlords can expect higher returns especially if they are creative with the space they have. Renovations such as loft conversion and partitioning rooms can help increase a landlords yields.
What are the disadvantages?
It’s a known fact that students enjoy a party, so it’s not unheard of for landlords to receive noise complaints from their neighbours or the local council.
Additionally, as a result of general wear and tear and the occasional party, it’s likely that the cost of maintenance and upkeep will be higher than it would be with families and individual tenants.
Also, accommodation rented by students is often vacated for the summer whilst students go home or on holiday which means there will be a lull in rental returns.
Managing the Downsides
If you want to take advantage of the benefits and mitigate the damage then it is advisable to use a property inventory company to ensure your items are recorded accurately minimizing disputes which can be common when renting to students.
If you decide that letting to students sounds right for you, there are a few steps you’ll need to follow. Firstly depending on the capacity of your property you may need to register with your local authority and classify your proposed student accommodation as a house in multiple occupation or HMO.
Landlords can also apply for university accreditation, so students seeking private accommodation will be referred to your property. Thus ensuring that when the term begins your property will have been assessed and you'll be prepared to take on tenants.
If you are considering a student let in London then talk to us about managing your inventory then talk to us about our inventory services. Our inventory clerks are experienced and thorough with our reports consisting of a minimum of 150 pictures to ensure your protection.
If you want to rent to students but don’t have the time to protect your property properly then talk to us about how we can help and assist you in reaping the rewards without the repercussions.