Should I Rent to Students?
Published: 19/02/2019 By Jane RobathanAre students the most worrisome group to rent to? If you want dependable, economically shock-proof tenancies, renting to young learners is a lucrative pathway.
What’s great about student tenancies
Student lets are one of the most robust markets there are. Untouched by economic downturns, properties in university towns are always in high demand and attract higher yields. This group of tenants normally stay for a 12-month minimum, usually secure a property 6-months in advance and do so at certain times of year, making void periods a rare occurrence. This helps agents and landlords predict the marketing, cleaning and upkeep of homes between tenancies, helping everything run smoothly. Often guaranteed by parents or at the very least subsidised by loans, these tenants are also financially stable. Essentially, these lets are the most seasonal, predictable and reliable of all. Youngsters are less fussy than professional tenants and don’t expect perfection, so landlords can furnish and update a home cheaply.
What to watch out for (and what to do about it)
As most students will be moving out of their parental home for the first time, it's a good idea to hold their hands. Show them around the house and teach them how to turn off the mains water and check the electricity fuse box. They won't remember everything, so leave a document in the house with instructions for emergency maintenance issues and helpful tips. We've put a Student Welcome Pack together that you can use for any type of property (it downloads as a booklet, ready to hand out). Let your young ones know who to contact if they need help or have questions and what to do in emergencies. By being supportive, offering guidance and opening up communication, you're inviting responsibility.
Parties: Go into this open-eyed, knowing that your tenants will likely hold gatherings. It’s a good idea to outline your local council's rules about noise levels and add a little information about the neighbours. Perhaps if they know that two-year-old twins live on one side, they will be more mindful.
Wear and tear: Because these are often larger (and younger) households than most, you can expect more wear and tear compared to other types of rentals. As you may not be expected to decorate between tenancies or update the bathroom, the pay-off levels out. Certainly make sure you're happy with the terms of your insurance as this group of tenants are more prone to sudden and dramatic damage than others. Then again, you're gaining a higher yield.
Drop-outs: It's easy to protect yourself from students who drop-out. Add a clause in your tenancy agreement to ensure the whole household is responsible for replacing anyone who leaves.
If you want the highest yields, opt for university towns in cheaper areas such as the Midlands, North or North East. Research places like Manchester, Liverpool, Nottingham, Sheffield and Leeds where prices are low and demand is high. Look for new trends like Hull, which was reported as a top investment in 2018. This type of let is usually more about providing the investor with steady income that it is about capital growth, with many student lets topping up pensions.