Some may be daunted by the prospect of letting to students but opening up a rental property to this demographic often proves to be very fruitful. In fact, 14% of landlords let to students and most of them never encounter any problems. Like everything, with pro’s there comes cons but with a good understanding of the market, there’s no reason why student lettings can’t be smooth and stress-free.
If you’re considering renting to students, take a look at the pros, the cons and the processes you should follow throughout in order to avoid any tricky situations…
What are the benefits of renting to students?
The first huge positive in renting to students is the constant demand. There’s around 2.2 million students in the UK, and in most university towns there’s not quite enough student housing to meet the need for it. During term time, there’s often a rush to secure a house within reasonable proximity to the universities and landlords are rarely left short of applicants. Plus, students don’t ask for much. They simply need somewhere that’s functional with affordable rent.
Speaking of rent, students will often rent out a room from you, as opposed to the whole house. This is super beneficial to landlords as it means that you’d be receiving more money in rent payments than you would with a family renting out a house, for example. Think about it; if you have a four bedroom house and each student is paying a decent sum of money for their room, that’s a fair bit of income. Plus, you’re generally guaranteed at least nine months of it during term time and should you have tenants drop out and leave your property, there will always be tenants ready to snap up the newly available room.
Your advertising costs for tenants will be minimal as word of mouth in the student community is super effective. As previously mentioned, everyone is looking for student lets. And if you meet a few possible tenants that you’re unsure of for any reason, you have the flexibility of saying no as you won’t be short of alternatives.
You may think of students and think parties, drinking, accidents and damage. This isn’t an unjustified opinion – students are indeed stereotypically known for their many parties and drunken escapades. Obviously this is not always the case and many students lead a much quieter lifestyle, however if you do end up renting to a group of rowdy good-timers, you do always have the security of their guarantors – usually their parents – to fall back on in the event of any damages or late payments, should it come to that.
What are the downsides of renting to students?
Before rushing off and investing in a student property, it’s important to consider the downsides to renting to students. Again, their lifestyle can be an issue. They are likely to be inexperienced in both living away from home, so may not look after the property particularly well, and inexperienced in managing their own money. Students are famously financially challenged and paying the rent on time may not be their number one priority.
Students will expect their house to be fully furnished with beds, sofas and kitchen white goods as the basics, so this is an extra cost to content with. These don’t need to be frilly and fancy though. Prioritise sturdy and strong furniture that will be able to withstand a bit of wear and tear. Similarly, your decor doesn’t need to be anything special. We recommend neutral walls and dark coloured basic carpets that will hide marks and stains.
Despite the demand being high and always having your pick of the bunch with tenants, it’s important to remember that students do go home during the summer, so you may be left with an empty house for a few months. These days most landlords can get away with a 12-month contract, so if this is the route you want to go down then you won’t be left out of pocket.
What to remember when renting to students?
Once a property is prepped, furnished and ready to take on the world of student lets, it’s time to consider the necessary processes when securing the perfect student tenancy. The process shouldn’t be too dissimilar to regular tenancies but here’s a few things to remember:
- Screen your tenants well. It’s important to follow the usual screening process, however you may come across issues when running a credit check. It’s not unusual for students to fail credit checks – they have probably never borrowed money, used a credit card or paid bills, so don’t let this put you off a perfectly suitable tenant.
- Always ask tenants to provide a co-signer or guarantor who will be able to pass a credit check and pay the rent if the student cannot. Ensure you have contact information for these guarantors as they can help to resolve any problems with the tenant that you might encounter.
- Meet the tenants in person and show them around the property. Show them how to use everything and try and build up a good rapport. The more mutual respect there is within the tenancy, the less likely your tenants are to be reckless with your home.
- Conduct quarterly inspections throughout the tenancy to check for any maintenance or damage issues. Make sure that your tenants are aware of the deductions that you can make from their deposit for damages or the need for professional cleaners at the end of the tenancy.
Renting to students can be a hugely profitable and great market to be in – you just need to know your stuff. If you’re still wary, look at taking on a letting agent. There are plenty out there who specialise in student lets and can help you through each step of the way and handle the negative situations that might arise.
Be thorough, find good tenants and you’ll be in for a simple and rewarding tenancy.