All you need to know about renting to university students
Renting to students often gets a bad rap. The stereotype of noisy parties and student loans spent on entertainment rather than rent has put off many landlords. However, renting to students can be lucrative. It’s worth considering if you already own a rental near a university or are looking at locations for your next investment.
Here’s an overview of the upsides and downsides of the student rental market.
Upsides of renting to students
- You have a guaranteed market. There's always a high demand for accommodation in a university town. You won’t have to work hard to find student tenants, so marketing costs are minimal. Plus, tenancy lengths are usually fixed to cover the academic year, and vacancy rates are low.
- Higher rents. Multiple tenants on one lease mean you can charge a slightly higher rent than you could to an individual. And as a landlord, this results in higher yields and rental returns.
- No need for upgrades. Students tend to be less fussy and have lower expectations than other renters. They are more interested in affordability and basic comforts than a high-spec kitchen. (Student rentals do still need to meet all the requirements of the healthy homes standards.)
Downsides of renting to students
- Financial inexperience. Immaturity and inexperience with handling money can mean inconsistent rent payments. However, rent guarantees from a parent, direct payments, and early intervention help mitigate the risks.
- Student lifestyle. The short-term nature of student rentals means the property can suffer more wear and tear. Furthermore, there could be issues with late-night parties and noise. Security deposits and regular inspections plus setting clear expectations around behaviour reduce the potential for problems.
- Furnished accommodation. Most students expect rentals to be fully furnished. You will need to account for the initial outlay and ongoing maintenance.
What are students looking for in a rental?
When it comes to university flatting, here are the top four factors on every student’s wish list.
- Central location. The rental needs to be close to the campus or have good public transport links. Ideally, it should also be handy for bars, cafes and shops.
- High-speed Wi-Fi. Many students spent much of last year studying online, and ultra-fast broadband is an absolute must.
- Affordability. Money is always in short supply for students, so affordability is vital. To keep rent and living expenses down, most students share with flatmates.
- Functionality. Properties with multiple bedrooms and communal living spaces are ideal for student sharers. However, students will need a private room with enough space for a desk to study. Also top of the wish list are a washer and dryer.
Thinking about investing in a student rental? Get in touch with your Loan Market adviser for personalised advice.