Becoming a landlord can be fraught with countless considerations, such as who your tenants will be, and how this will impact on your rental. Families, couples and single professionals are just three considerations, but there is a huge market in student rentals, especially in cities with universities.
You may already own a property in a student town or be looking to invest in this potentially lucrative area. If so, it could be a good little earner if tackled in the right way, but it may be worth bearing in mind that letting to students isn’t always an easy ride.
Why not take a look at these helpful points before deciding whether to take the plunge?
- Students are usually less fussy than other tenants. Nevertheless, renting out a below-average property at an above-average rate could scare off potential tenants. While students tend to be less bothered by a dated kitchen or unglamorous bathroom, more serious issues such as damp and crumbling paint could send them running to their next viewing.
- You gain more income per room. When you rent to couples or single professionals, there will usually be more rooms per person overall. With students however, each bedroom will be occupied, with rent coming in from each room rather than the house as a whole. The students might pay you from a single account, but the theory is that you rent per room, which means the yield should be higher.
- There is a large market for student housing. In every university town or city students require somewhere to live. This means that the market for their accommodation is huge and, with the right set-up, you could have no shortage of potential tenants each academic year.
- Damage to the property. Students are notorious for party antics and alcohol-fuelled nights out. Sometimes this can end in damage to a property or furniture, so it could be a good idea to remain prepared for additional costs at the close of each year’s tenancies.
- Increased competition. Depending on the town or city you are considering renting your property in, certain areas may already have a plethora of accommodation available. If this is the case, you might struggle to rent out every room in the house, which means that thoroughly researching your potential market can be a huge help when establishing whether there is actually call for more student housing. You could even put in a call to the area’s university, who may be able to clear up any questions.
- They need a guarantor. Due to the perilous financial situation some students find themselves in, they may usually have to get a parent to stand in as guarantor. While this shouldn’t be an issue, should one of the tenants be unable to keep up with their payments, it could increase stress.
- Students can drop out of their course. An issue that naturally happens at many universities is a student being unable to complete their course. This can happen at any time during an academic term, and if your property agreement is set up to aid single tenancies, it could prove a potential problem, as the vacant room will not be earning any money.