Student rental might not seem a great idea at the start of 2021. We’re in the depths of another period of lockdown throughout the country and many, many students are living at home and participating in online learning. However, this market is not going away, and with COVID vaccines starting to be rolled out, the future looks bright for student renting.
Here are some basics in terms of renting to a student market, starting with why it’s such a good idea to rent to students.
Why rent to students?
Student rentals are a great option. Firstly, it’s huge market; there are a lot of people looking for affordable accommodation. In terms of the actual figures, The Higher Education Statistics Agency (HESA) reported there were 2.34 million students in 2017/18. That’s a lot of people, and it proves the size of the market available to you.
This is consistent demand, there’s always going to be students that want to rent properties. Also, there’s a one year turnover, this keeps a property fresh and dynamic (whilst also minimising the impact of any issues). The one year renting period also provides a consistent income, and often can prevent having an empty property. There’s more upfront payments, this means that you can be sure you can afford to keep the property in a good condition, and many enjoy having cash at the start of the year and rationing for the next 12 months.
Another great feature with HMOs and student renting is that by the time they have been at university for several years they will have often friendship groups, this means that if you can find someone for a room in a property there may be others (maybe even enough for the whole property, meaning you don’t have to keep searching for more tenants)
The risks of renting to students – and how to mitigate against them.
We have all heard that ‘Students leave more mess’. However this isn’t always true, you may find that the students you rent to are quire clean. If this is an issue that is becoming a problem, you can speak to any tenants and ensure that they are cleaning up after themselves and making sure the property is clean. In this market you can also be more strict when it comes to returning the deposit payments (of course inline with the Deposit Protection Scheme).
Students expect furnished accommodation. This is an issue, but it only incurs a one-off payment on the side of the landlord. Also, you may find that the high rental yields are able to afford you the ability to replace any furniture that needs to be replaced.
It requires more hands on management. This is true. However, many HMO schemes are quire hands on generally. In addition, you can always have support from local tradesmen, and if you are successful enough to be having issues with time management, you can recruit others to help you with your property business.
Make sure to pick the right location.
When it comes to student HMOs, the location is quite important. Make sure to research, firstly, the best cities to invest in a property. There are many cities that have a large student population. Having affordable housing stock suitable for purchase is also important. Sheffield, Leeds, Portsmouth, Newcastle, Liverpool, Brighton and Glasgow are all great options.
However, make sure that you find a property in a ‘student area’, most residential areas may not have a large population of students and this will be difficult when attracting tenants. For the example of Newcastle, a large student population lives in Jesmond and Heaton. In Liverpool, many student live in Kensington.
In 2021, be dynamic
No one is certain when there will quite be the huge demand that this sector provides, but it will return, and it will return this year. Try to be flexible in your approach, ensure you are marketing the property in the right place, make sure to pay attention to the fine print you are putting on tenancy agreements, and don’t assume that the tenants will be as reliable as previous years. 2021 will be a challenging year for all landlords, and all professions, but with the right guidance and an ounce of caution you can reach property success.
If you want to know more about HMOs in general, and the specifics of renting, then make sure to have a look at the impressive range of Nick Fox books. We have loads of great books about property development, property rental, and HMO rentals.
Nick Fox started his property investment career 10 years ago and his portfolio has grown to one of the largest in the UK. Nick now mainly focuses on HMOs (houses in multiple occupation) and works to help others achieve property success too. Visit here to find out how he can help you.
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