Considering renting to students? Here are 10 reasons why you should
The UK is a world leader in higher education. Britain is the second most popular country in the world for international students. In fact, the number of international students applying to UK universities has doubled over the last 20 years (though, of course, COVID-19 has understandably reduced these numbers temporarily). And after a slight drop in university applications from UK students three years ago, that figure is on the rise as well. All of this makes it a great time to be a student landlord.
However, some landlords are wary of student tenants. Property damage, noise complaints and late payments are often cited as problems. But are these stereotypes fair? There were 2.34 million students enrolled in higher education in 2017-2018. Are we letting a handful of bad eggs give the entire student population a bad name?
If you’re in two minds about renting to students, here are ten reasons why you might want to give it some thought. If you’re a student landlord and can think of any we’ve missed, why not drop us a message on Twitter and let us know.
It’s a thriving market
The rise in tuition fees introduced back in 2012 did result in a slight drop in applications. However, since that time the amount has rebounded. The COVID-19 crisis has had a definite impact on admissions, particularly when it comes to international students, given the ever-changing travel restrictions.
However, after the A-Level results scandal left more young people than ever before determined to fight for an education, admissions have continued to remain steady, despite the dangers, complications and uncertainties surrounding coronavirus.
Indeed, the number of students enrolling is still relatively stable and there is little sign of any major changes in regulation or legislation which will affect the number of students applying to university in the near future.
The student housing market is incredibly resilient, with investment into student accommodation across Europe increasing by 250 per cent between 2018 and 2019. Any effects of the pandemic are likely to be short-term and when it ends, there could be an even greater surge in interest. So, why not get in now before the rush?
Rental cycles are predictable
The student rental cycle is fairly regular. Tenants typically find somewhere to live towards the end of term, move out over the summer and move into their new place at the start of the new academic year. This gives landlords a degree of security.
Yes, new tenants may have to be found each year, but demand is usually high. Student properties are generally quite easy to fill provided they’re well maintained.
Tenants typically find their property for the next academic year at the end of the current one, meaning landlords can agree tenancies in advance and have the summer to prepare.
Move-out dates can be agreed in advance and, provided there are no issues on either side, tenants will usually see their tenancy out. This makes it easy for landlords to plan ahead and get their property back on the market in time to fill it for the next academic year.
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Students are financially reliable
As mentioned earlier, students can have a bad rep when it comes to rent payments. But this reputation doesn’t necessarily tally with reality. In fact, most students provide their parents as guarantors, giving landlords an easy way to reclaim any late rent payments. Rent payments may also be subsidised by student loans, making late payments less likely.
Houses in multiple occupation (HMOs) are profitable
Most students want to live with their friends. In fact, shared accommodation is a key part of student life. For this reason, student landlords typically focus on providing HMOs. This is good news for the tenants but also for the landlords, who can charge more per room and make more money overall.
However, landlords who own HMOs need to obtain a landlord licence – those who don’t could be hit with enormous fines. You can find our full guide on this here.
Students have the highest rental yields
For most landlords, yields are the bottom line. How much will I make compared to what I’m putting in? Student properties have some of the best rental yields in the UK. At a time when many buy to let landlords are feeling the squeeze, this may add to the appeal of the student rental market.
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Students are drinking less
Student life is thought to be fairly raucous. But today’s young people drink less than other generations. In one study, almost half of the students surveyed (44 per cent) said they regularly socialised without drinking alcohol and there is a general shift in today’s youth away from the unhealthy habits that characterised their forebears.
In fact, fewer than one in five students say they get drunk more than once a week. Which is less than many young and middle-aged professionals.
With COVID-19 regulations making socialising at the pub more difficult too, the changing attitude of young people away from excess drink and drugs could shift even further.
Though, insurance is still key as restrictions force students to socialise at home, and during a difficult period at that.