Letting to Students: the Lowdown
Student tenants are often targeted by landlords, despite their reputation for being noisy and leaving properties in a poor state once they move out. But that stereotype is far from always fair, and students lettings often bring higher yields than other lettings. Letting to students can sometimes be harder work than letting to professionals or families. So is it worth it?
Why to be a Student Landlord…
When you buy a student property, you have a guaranteed market. University towns and cities tend to have distinct student areas along transport routes to the university. Buy in those areas and you have a captive market. Often, these areas are the cheaper parts of the city, so the initial investment is lower. Students also tend not to be too bothered about matching bathroom suites or brand new kitchens. That doesn’t mean you should try and rent out a wreck to students, but as long as everything is clean and in a good state of repair, you don’t need to put in the latest designer features either.
Students will generally pay their rent up-front in termly instalments when their loan money comes in, or their parents may pay. That tends to mean that while they have less money than other tenants, their rent payments should be relatively reliable.
Rental yields for student properties often hit over 10%, especially if you can find a bargain property, and occupancy levels should be high.
…And why Not to be
Students are usually young people away from home for the first time. Their first concern is probably not likely to be how much sleep their neighbours are getting, or whether the grass needs mowing. They are still learning how to look after a home and operate in the adult world. They might not be as fussy about décor as others, but they may be less likely to be able to deal with basic problems such as a radiator that needs bleeding, which other tenants would do themselves. If you let to students, you need to be aware that you have to deal with problems more regularly than you might otherwise have to. They might not be as capable at looking after the property as others, so make sure you have that all-important landlords insurance in place.
Finally, some experts are now warning that student yields are likely to drop as fees increase, and student numbers decrease. Many students who would previously have moved away to go to university may stay at home with parents, and in their place may come more foreign students, who often have more money and prefer to stay in university or privately owned halls. Only time will tell, but for now, student property is still a good investment.