Buying to Let to Students

Students might not seem like the ideal tenants, what with their reputation for rowdiness, poor hygiene and lack of respect for other people’s property.

But specialists in the student property sector say this is an unfair stereotype and that students can be excellent tenants – as long as you pitch your property at the higher end of the market.

The demand for student accommodation is on the increase, but so is the number of buy-to-let landlords. Estate agents are wise to this boom, and property prices have rocketed in many areas with universities.

However, if you can afford to buy, it should be in a town or city with a thriving university population – Nottingham, Manchester or Sheffield, for instance.

If you can’t find a suitable property or haven’t got the time, a student lettings firm such as Campbell Property will do it for you. And for a fee equal to 1% to 6% of the purchase price, the firm will also provide a wide variety of management services, including renovations and refurbishments, providing furnishings, finding tenants and setting up tenancy agreements.

Refurbishing a property to a good standard could have immediate benefits because it will probably increase the value of the house. This gives you the flexibility to remortgage should you wish to withdraw equity.

Your property will need several bedrooms (one for each student or couple) but only a single, modestly sized reception area. Multiple bathrooms are a necessity in larger houses.

Young students are unlikely to bring their own beds and wardrobes, so furnish your property with items that are basic but robust. Desks will be considered by prospective tenants as attractive additional features.

Decorate regularly – ideally before the start of each new academic year – to make your house appealing to tenants, who will select the best from the many places that are likely to be available.

By maintaining high standards at your property you will attract more affluent students, who will be prepared to pay more rent and so want to keep their new home in good order.

One advantage of student tenants is that there will be very few ‘void’ periods when you have no tenants, leading to higher returns on your investment. The only significant length of void time will be during summer, when students return home and you can rent to holidaymakers, or to people who are new to the area and seeking short-term accommodation.

To avoid the house turning into a revolving door of students moving in and out, have your tenants sign renewable contracts committing them to the whole academic year and requiring them to give a decent period of notice if they choose to leave (a month, say). Demand a full term’s rent at the beginning of each period.

Another plus to having students as tenants is that they are not prone to bad debts because they usually have parents and guardians to cover any money they owe. The drawback is that these same people may all want to offer their suggestions on how your house should be run – and that’s after your several tenants and their boyfriends and girlfriends have had their say, of course.

For more information on buying to let, see the UK Net Guide article "A Guide to Buy to Let".