Why should you let property to students?

by Gary Whittaker

Students often get a bad reputation when it comes to the way they live. TV shows, bad word of mouth and various stereotypes would suggest that the average student is bad news for landlords. Most are portrayed as too lazy to clean, dirty and disrespectful to the property itself. But in reality, this is not the case. 

Students can actually be some of the best tenants around, and over the last few years, this is why the sector for student lettings has grown so quickly, with billions of pounds piled into this kind of stock across the nation's towns and cities. But why has student property become such an important investment asset, and just why are so many people now spending big on this type of stock? 

We look at just a few reasons why you should be letting property to students this year. 

Evergreen demand

While the general rental market can experience fluctuations in demand from time to time, the student market is largely evergreen, and experiences little in the way of change each year. The fact is that there are a large number of people studying across the country, and not enough university owned homes to meet their needs. 

This is why the private rental market for students has climbed so markedly in the last few years, and with UCAS reporting that there are more than 450,000 students applying to go to university this year. This is a similar number to experienced in each of the last few years, and there's no sign of a let up in demand on the horizon. This can only be good news for agents and landlords. 

Longer tenancies

One of the biggest bugbears for any landlord operating in the rented sector is when they have void periods between tenants. These can be troublesome, because when there's no money coming in, the landlord often has to pay their mortgage themselves, which can leave them out of pocket. 

However, when dealing with student tenants, this problem is far less prominent. Students, unlike young professionals, will almost always take on a 12 month lease, which means landlords have a secured income for at least a year, and do not have to worry about attracting their next tenant any time soon. Term times also help in this regard, as they can make the market easier to predict throughout the year. 

High yields

Because student homes can often be bought for a little less than mainstream market properties, and because they can be let for more (students tend to share), it means that the yields and returns earned by landlords are often markedly higher than they could achieve elsewhere in the rental sector. 

For example, a recent report from Simple Landlords Insurance suggests that there are at least seven university towns and cities nationwide where landlords who are letting to students can earn as much as 9.5 per cent or above in terms of rental yield. 

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18-August-17Property Management