Students are sometimes viewed as young, messy and financially unstable; Why would any landlord want to let to them? It’s certainly true that students present a unique set of challenges. For one thing, it is either their first time living away from home (and you can bet that most of them have never emptied a bin before) or, secondly, they may have spent a year in the safety of a university hall of residence with their cleaning done weekly, loo rolls and light bulbs provided on demand and a team of staff trained specifically to deal with issues arising when a large group of young people live together.
Nevertheless, there are a number of reasons why letting to students is a good idea;
- The vast majority of students pay their rent on time, and having their parents act as guarantors ensures that you are able to get any shortfall from them
- They will often pay their rent 3 months in advance to coincide with their student loan payments
- You can fit in more tenants per house (a house with 2 reception rooms could have one converted to an extra study bedroom, thus improving your return)
- They will live in areas that other tenants turn their noses up at (so long as they can catch a bus to campus easily)
- They don’t expect power showers, frosted glass sinks or hot tubs, although they’d probably like them!
- They will put up with swirly carpets and dodgy wallpaper (just about) if the property is in a popular student area
- They almost never turn into sitting tenants
- On the whole (there are exceptions) they are intelligent, sparky and fun and usually manage to grasp fairly quickly whatever it is you are trying to communicate to them
In addition to all these benefits, research published in 2013 by the National Landlords Association (3.9.13), shows that students are the least likely group of tenants to fall into rent arrears, are in the properties with the lowest amount of voids and have one of the highest returns on capital, 6.7%, as compared with 6.1% for the average let. (HMOs have the highest return at 7%.)
However, it is important to bear in mind that the market has become more competitive in recent years. Universities have invested in new halls of residence and the corporate private sector is a fast growing area, with companies such as Unite, Mansion Group and Campus Living etc., building new student accommodation. When this is combined with the recent drop in student numbers (both domestic and international), then the small private landlord should ensure that they buy wisely, maintain properly and invest in good quality, attractive furnishings and fittings to keep their properties fully tenanted. Gone are the days when a student would be content with sub-standard, damp and draughty houses.
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