Students can make good tenants & here’s why:
1. You can fit more of them into a house. A 3 bed house will frequently accommodate 4 sharers – and that’s without letting the cupboard! This is more intensive than a let to a single tenant or even a house of professional sharers which can have a potential benefit on the yields.
2. Students aren’t quite as fussy. Students particularly undergraduates have tended not to be as fussy as professional tenants. They are more prepared to put up with slightly outdated kitchens and colourful bathroom suites than design conscious professional tenants. However, landlords shouldn’t be complacent; with the advent of more and more private halls accommodation standards are rising.
3. Rent in advance. Some tenants or more accurately their parents will often pay upfront for each semester or term. This is handy for a landlord as they have the rent in advance with which to pay any mortgage or other costs.
Potential returns:
The potential returns for renting to students are good. This is for several reasons. Landlords receive returns on their buy to let investments in two ways. Income from rent and from the capital appreciation of the underlying asset value of the property.
Income:
Renting to students can potentially generate a much higher yield than letting a property to a single tenant. Student rentals have the potential to significantly out perform multi lets for professional tenants for several reasons:
Students are not as fussy. This means that they are prepared to live in areas not suitable for professional tenants and where capital values of properties are much lower. This potentially generates a much higher rental yield for landlords.
It is possible to let out more rooms in a student house generally thereby increasing the potential rent. For instance many student landlords who let a 3 bed house will let the lounge as a bedroom.
Capital:
Research has suggested that University towns have outperformed other towns in terms of house price growth.
UK house price. There is some potential for an investment in a University town to do better than the UK average.
It’s more important to concentrate on the characteristics of the individual property and the immediate area in order to generate good future growth prospects.
Type of property to go for:
Students generally prefer to go into Halls for the first year after which they then look for accommodation in groups of 4 or 5. Research shows that different student groups have varying accommodation requirements. Post graduates for instance frequently prioritise a peaceful working
environment and their demands are very similar to that of professional renters. Undergraduates are more likely to request accommodation located close to entertainment facilities and town centres and
are more willing to live in larger shared properties.
Location is often a key factor. Students like to be near each other.
If you can find out where the ‘cool’ bars and places to hang out are; then a property close by will definitely have a marketing advantage. Essential is that your property has good access by public transport to the University campuses as well as the night life and basic shops and services. Not all
students have cars!
A three bedroom property is probably ideal. This is because with a little bit of work, it should be possible to convert one of the ground floor rooms to an additional bedroom thereby allowing you as the landlord to accommodate 4 students. If you provide accommodation
for 5 or more students, then you will very likely have to obtain a licence for your property as a House In Multiple Occupation (HMO).
Victorian terraced properties often provide ideal student accommodation because of the generous room sizes. Large spacious rooms are particularly appealing to students as these are often more than just a place to sleep. In theory they will be places of study and also their private space to retreat to when all the partying and communal living gets too much! Landlords should therefore look for properties with 3 generous double rooms and one living room that can be converted to this.
If you are an existing landlord or potentially a first time landlord get in touch with Belvoir Sheffield today to take advantage of our vast expertise and experience to ensure you are getting the best advice.
Contact us today on 08452 60 40 90. or email us at sheffield@belvoirlettings.com
Source: http://bit.ly/W3IIxq
