The student property market is very lucrative and desirable to get into for many landlords. Private landlords can make thousands of pounds from converting their property into a student house and many often get the landlord bug and own several student houses on the same street. Here’s a guide to your first foray into the student property market:
Location is vital
Firstly, it’s essential to make sure that your chosen property is in a good location. Students are looking for somewhere close to their university, in an area where other students live and to be in close proximity to shops and bars. Many university towns have particular student areas where buying a property is relatively cheap. Do some research and find the best location and what average rent prices are in the area. It can be advisable to live relatively close to your rented property or to employ a maintenance team if you have multiple properties so that there is someone on hand to fix any problems.
Don’t be put off by size. Students aren’t very demanding and can be happy to live almost anywhere with multiple rooms. There will be groups of all sizes house hunting and many will be open to living in spaces such as box rooms, attics and even cellars if the rent is adjusted accordingly. If you have a property which has extra space, converting it into a bedroom is advisable – there will definitely be someone happy to live in it. And you can charge rent per room so the more rooms the higher the profit margin.
Don’t worry too much about the décor. Student housing doesn’t have to be top of the range. Students are looking to save money - not spend thousands on renting- so renovating the kitchen/bathroom isn’t always necessary unless it’s essential. As long as everything is working and in an averagely good condition students are quite content. You don’t have to provide top end furnishings either. Many student houses are kitted out head to toe in Ikea. Think functional cheap furniture, plain walls and hard wearing floors. This is also handy if the tenants do damage anything as it will be easy and inexpensive to replace.
Rules and regulations
There are a few rules and regulations to be aware of when renting to students. It’s wise to check in with your local council before going ahead and letting your property out to students just to make sure that you’re compliant. You will need to apply for a special house in multiple occupation licence. It’s essential to check out whether you need to have fire doors downstairs, smoke detectors in every bedroom and how often to have regular gas and electric checks.
Ensuring your property is as safe as possible is wise as student homes are often targeted by burglars. It’s a good idea to have doors which lock on a latch rather than having to physically lock the door as if there are multiple occupants there becomes more chance of someone forgetting to lock the door, making them an easy target.
Student’s themselves may seem unreliable but backed up by their better off guarantor parents it’s pretty much a safe bet that you’re going to get the rent money each month. Renting to students provides a reliable source of income which is guaranteed year on year. Often students arrange to let their properties about six months in advance so it’s easy to plan your finances ahead.
There are some downsides to letting out to students. They are unpredictable, you may receive noise complaints from neighbours or the council and there can often be damage to properties. This can be very minor things like general wear and tear from them putting posters on the walls and spilling drinks on the carpet or bigger things like broken bannisters from house parties. The best way to combat this is to make sure you’ve outlined all the terms and conditions in a contract and that they’ve each paid a hefty deposit. Most student landlords charge for the clean-up at the end and tenants very rarely expect to get their whole deposit back.
It’s often good to meet your potential tenants before when they organise a viewing so you can decide whether you want to let the property to them. Students studying more difficult degrees such as sciences and English/history are often better tenants as they have a lot of work to do so won’t be partying as much. Although, once you meet a group of students you’ll usually have a gut feeling whether they look okay or not. International students are also usually a good target market too as they definitely need somewhere to live and may even stay there for another year. The student property market is hugely profitable as a buy to let so it’s well worth giving it a try and investing.