There are few absolute certainties in life, particularly in real estate. But one of the few things you can be certain of is that students are always going to need somewhere to live. That’s why, for many current and aspiring landlords, letting to students is one of the most consistently popular and potentially profitable avenues to explore.
But before you settle on this path, it’s important you understand exactly what it is you’re getting yourself in for. The good and the bad.
The risks of letting student properties
Damages – Students are (mostly) young and almost always a little bit reckless. For most of them, this will be the first time they’ve lived away from home and they will relish this freedom. That does mean, unfortunately, that damages are common in student accommodation, with housing disrepair claims and damage claims a regular part of student landlord life.
The gap months – In the months where your tenants are not in school (the summer holidays) the property will be sitting vacant until the new term starts. It’s very unlikely you’ll find a tenant willing to live there in the interim, so this is a loss you’re just going to have to factor into your costs. Or you could insist on a 12-month lease, which is a common option.
Party animals – It’s more than likely you’re going to be the one dealing with all the noise complaints from neighbours and local council members. For this reason, we’d recommend vetting your students beforehand and making sure they’re not the kind who are going to give you too much of a headache.
The rewards of letting student properties
Larger profit margins – As you’ll most likely be renting each room out on an HMO basis you’re getting way more bang for your buck, as it were. If you have a living area you can convert into an extra bedroom then you could even potentially charge 4 separate rentals for one 3-bedroom home!
Demand – There is always going to be lots of demand so you’ll have no trouble finding tenants. Particularly if the property is close enough to the campus. Or a pub! Students also tend to move on after two or three years for obvious reasons, which means you won’t be tied into any long-term contracts.
No fuss – Students are a notoriously laid back bunch who won’t care too much about everything being state-of-the-art and ultra-modern. Indeed, most of them are just happy for the opportunity to get out of their parent’s houses and live with their peers. So don’t worry too much about spending money on upgrades and decorations for student properties. Think about it, would you have cared back when you were a student?