If you are considering buying property to let and live in a city or large university town, then it may have crossed your mind to let your property out to students.
There are two sides to letting student accommodation, and you will need to consider the positives and negatives of student lets before going down this route.
The Pro’s of letting to students
Don’t be put off by the student stereotype: lazy, unhygienic teenagers with little respect for your property. In most cases students can make good tenants, and if you offer well-maintained accommodation, you will attract students that are willing to pay more rent for better quality rooms and who are used to good home comforts.
The demand for student accommodation in busy university towns and cities is high, so you will be pretty much guaranteed rent paying tenants, and avoiding the costs of having your property standing empty for long periods.
Usually the only time you may have you property empty would be during the summer when most students return home. You can use these times to redecorate your property with a fresh coat of paint, take care of any minor repairs, or even schedule any major renovations or remodelling work you have planned for the property.
You could even utilize the summer down time to offer short-term temporary accommodation for people who may be between properties. This is where a person may have sold their house, but may not be in a position to move into their new property straight away.
Financially students are usually in a good position to keep up their rent payments as they have not had time to run up huge debts, and their parents will often act as guarantors who would be able to cover any monies owed at the end of the tenancy agreement.
The Con’s of letting to students
The most obvious downside of student lets is that they are not long-term agreements. You may well have a high turnover of tenants, which will mean a lot more paperwork to sort out. If this doesn’t sound appealing to you then you may consider using the services of a student lettings management specialist who can find tenants for you, and deal with setting up tenancy agreements on your behalf.
If you don’t mind paperwork, and are happy to manage the lettings yourself, then make things easier for yourself by getting each student to commit to signing up for a whole academic year, with a decent notice period if they want to leave before it is up to enable you to source another tenant.
Students will move in without any furniture, so you will have to supply a bed and some clothes storage, such as a wardrobe and chest of draws, but these need only to be basic, but well made pieces. You could source these from second hand shops, and they do not need to be matching sets. Having a desk in each room would also add to the appeal for potential tenants, and may well help a student choose your property over another without one.
To make letting to students a profitable investment for you, you would need a property with a number of bedrooms. Many older Victorian properties have two rooms on the ground floor, one of which could be converted to an extra bedroom.
Students will usually stick to their own rooms, so you will only need a small communal room downstairs, and a basic kitchen set up. Some older houses will also have their original ground-floor bathroom in place, which is fine for student accommodation, and will also mean an extra bedroom will still be available upstairs to rent out.
Student Buy to Let Mortgages
Not all lenders offer this type of buy to let mortgage deal so best buy tables are not always the best source of comparison information when it comes down to costing this type of mortgage. Speak to your mortgage broker to ensure that you meet the lenders criteria in regard to the property, the number of bedrooms, minimum income level, the loan to value etc as some mortgage companies can offer higher rates for this type of mortgage deal.