Managing student tenants - Everything a landlord needs to know
There’s never been a more confusing time to be a student. As we move into October and unis begin to settle into their own version of the new normal, it’s become painfully clear that the needs of students in 2020 are a world removed from the needs of students in 2019.
For today’s UK undergraduates, tuition fees typically cost around £9,000 a year. Coupled with student loans, students typically graduate with around £50,000 worth of debt to pay off over the next 30 years. Students are also less interested in heavy drinking than they used to be. One-third of people aged 18-24 are teetotal. Plus, drinkers and non-drinkers alike are more health and image-conscious than they once were.
For student landlords, however, the real news here is that students in 2020 have significantly higher expectations than they did in years past, in part due to the rise of Purpose Built Student Accommodation (PBSA).
It’s worth noting, however, that the PBSA sector has not been left in the best shape by COVID, with many owners and operators of these buildings allowing students to break their tenancy contracts and even claim rebates in situations where they have paid upfront. The next 12 months don’t look any brighter and some parties are suggesting that PBSA operators might need to consider repurposing their accommodation.
Add in the inherent uncertainty COVID brings along with it, not to mention an environment where blended learning and online classes are more prevalent, and you have a situation where more is being asked of student landlords than ever before. Today’s landlords really need to pay attention and use best practice to ensure they look after tenants and their property and take advantage of the major opportunity that the market still represents.
So, what do today’s students want from their landlords and accommodation? How can landlords work with them to meet their expectations? And what do all student landlords need to know going into 2020 and beyond?
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Student accommodation has always been a quintessential part of student life and in the private rented sector, communal living and HMOs are still the norm. In terms of property features, today’s students value large bedrooms over large social areas.
This may be the result of spending more time in their room studying or online than in previous years, which is only going to increase in the months to come due to COVID. Landlords should also be aware of new restrictions around room sizes. As of October 2018, single rooms must not be smaller than 6.5 metres square and double rooms must be at least 10.2 square metres.
Fittings and furnishings
Many students will spend their first year in modern, quality accommodation provided by the university and they won’t want the quality of their fittings and furnishings to decline when they move into their own place. This means landlords are expected to provide the basics (beds, WiFi, TV, comfortable furniture, basic appliances) and to not skimp on them either. Landlords should also provide ‘welcome packs’ that include the inventory, tenancy agreement, advice for looking after the property and tips on the local area.
Proximity to the pub and campus were once seen as the defining pillars of importance for students but in 2020, with COVID-19 an ongoing major concern, proximity to the local supermarket might also be a legitimate factor to consider. Today’s more health-conscious students may also value being close to facilities such as gyms, parks and swimming pools.
What do student tenants want from their landlords? They want a landlord that’s attentive and responsive without intruding on their privacy. It’s also worth noting that most students prefer a hands-off landlord, with 15 per cent preferring indirect WhatsApp contact over anything else. In a climate where face-to-face contact carries inherent risks, this is unlikely to change.
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What do student tenants want from their properties? They want features that are going to make their accommodation feel like home and this includes:
- High-speed WiFi that can keep up with demanding online course schedules
- Inviting communal spaces for socialising in, with allowances made for social distancing
- A comfortable double bed
From a landlord’s perspective, students drinking less, studying more and valuing the quality of their accommodation can only be a good thing.
Enterprising landlords who are able to provide quality accommodation at a competitive price should find tenants fairly easily. And those tenants should look after the property better and give neighbours fewer reasons to complain.
Of course, there are going to be additional considerations as the pandemic develops and government guidelines shift, but as long as landlords are aware of the basics, it will be easier to manage everything else that gets thrown at them.
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Why rent to students?
If you’ve never rented to the student market before you might have some understandable reservations about renting to students. Noise complaints, late payments and property damage are all valid concerns. However, today’s students are generally more sensible than their forebears, particularly in the current climate, and there are plenty of ways to minimise damage to your student property. Students are also often asked to provide guarantors (most often their parents), and many receive student loan subsidies, which makes them financially reliable and less likely to fall behind on payments.
Above all else, what’s so alluring about the student rental market is the rental cycle. Indeed, the student rental cycle is predictable and demand is high.
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 large degree of security and flexibility.
Quality student properties are usually easy to fill too and as turnover is high, you can choose to make changes to your property, review rents and even sell up on an annual basis.
Granted, the properties might be slightly less easy to fill in the ‘age of COVID-19’. But even in the wake of the pandemic, and the A-level exam grade scandal, there has been a record increase in University admissions in 2020.
Finally, and most importantly, students typically live in HMOs, which offer higher rental yields – and there are also things that landlords can do to increase their profits further if they are willing to put the work in and get a little creative.
How to be a student landlord in 2020
Today’s students graduate with a level of debt that would have been unthinkable just 20 years ago, which makes leaving with good grades a matter of priority.
The need to study more and the emergence of the internet as the primary source of entertainment also means bedroom size is more important than ever, as is a high-speed and reliable internet connection. Going forward, with online lessons set to become more prevalent, this has never been more important.
In an increasingly confusing landscape and at a time in their lives where they feel quite uniquely vulnerable, all most students are looking for, however, is a landlord they can trust.
For the majority of students, moving out of halls and into privately rented accommodation is going to be their first encounter with the private rental market and it can be a steep learning curve.
All of a sudden, they’re having to speak to letting agents, arrange viewings and review tenancy agreements. With so much to learn, having a landlord you trust who feels like they are ‘on your side’ can be a major factor for students.
So, be transparent and honest with them and you’ll hopefully get a pretty rewarding tenancy out of it. And if you need any more help, download our handy landlord’s checklist for stress-free student letting.