Tips for Student Landlords
Renting to students can be a profitable venture, but it pays to be prepared. Here is some essential advice for any landlord new to student lets.
Do Your Research First
At the thought of the pound signs clocking up, most prospective student landlords are like Pavlov’s dogs at the sound of the bell. But before you turn into a salivating mess at the thought of money, it’s important to consider the downsides of running a property business. Like any business, the general rules of running and marketing an enterprise apply. You need to invest time and money in coming to understand your customers and then providing them with the products and services they crave at a competitive price. To be a successful student landlord, you’ll need the right property in the right location at the right rent. Running a successful student letting business is a yellow brick road to riches: uncertain; fraught with dangers; and a lot harder to travel than it might first look. It involves long hours spent sourcing, renovating and maintaining your property. After hours, you’ll need to keep up to date with the constantly changing laws on letting, and complete your accounts and tax returns. It’s far from fun and games.
Choosing the Right Property
If the downsides aren’t enough to send you running back to Kansas, then you need to decide where to invest your money. Student letting is a growing market which has attracted a rush of investors; money men who have recognised that such properties can deliver yields up to 10% each year, greater than any other property type. However, many investors sink their money into the wrong properties. They fail to realise that students like to share in groups of at least three. Realising this rules out smaller properties, but it actually means that many student homes with three bedrooms, which are commonly dismissed, can be good investments. Larger houses, which benefit from multiple rents, may not actually be the best option, therefore, as they will attract more buyers, driving the purchase price up. Before investing, weigh up your options, considering the location, the potential rental yield, rent-cover and loan-to-value along with the purchase price, to establish whether the property is worth pursuing.
Getting Your Property Ready for Rental
There is a list of tasks that any landlord should consider, particularly those running houses in multiple occupation. The most important include:
Student lets revolve around the academic year, which runs from September through to July. Peak viewing times are January to March. Consider this when advertising your let.
You’ll need sufficient buildings, contents and landlord insurance.
To increase your chances of finding tenants, participate in an accreditation scheme. This will demonstrate to potential letters that your property complies with legal standards and that you operate good management practices.
- Finish and Furnishings
Anticipate what students want and need in their home, and then give it to them.
Students will expect their home to be fully furnished, so they’ll make their decision partially based on your décor. To save money, get quality contract furnishings at an affordable price through a well-respected company such as Peel Mount
To avoid any disputes at the end of the tenancy term, draw up an inventory report. You cannot afford unfair disputes to harm your reputation, as positive referrals and are very important to help you find tenants year after year.
- Screening Tenants
Another way to avoid disputes or unhappiness on the part of either party is to screen tenants beforehand and ensure that all the paperwork is in place. Take the time to explain everything to them, ensuring that they know the procedure for reporting maintenance issues so that problems do not go unanswered.
Although the boom years of escalating house prices have come to a crashing end, there is still money to be made from student property. If you’re willing to put time and effort into research and accreditation, then the profits are yours for the taking.