Investing in student accommodation
1st Jan 2015 Managing your Money
Student property is increasingly seen as a profitable area for investors. Some landlords are already converting ordinary family homes into student digs because they can maximise the rooms and, therefore, the income. So how should you to go about it?
Location
Obviously, properties located close to a university campus or student union are going to be the most popular. Otherwise, ask around to see if there’s a part of the town that’s known as “the student area”. Gone are the days when students will settle for a grotty alcove of mould and dirt. Students now look for attractive properties that are well-kept and clean.
Bear in mind, though, that students don’t generally want a garden to nurture and maintain. For this reason, terraced properties with no outside space—and flats—are often the best investment.
Optimising Potential Bedrooms
If you’re looking at older-style properties, keep a look out for ones with two reception rooms—a living room and a dining room—as one can be converted into another bedroom, thus maximising the tenant capacity of your property. Be aware that if your house is three or more storeys high, or has more than five unrelated inhabitants, you’ll need a licence to rent it out.
Houses that have four or fewer unrelated tenants are best as they don’t classify as HMO (House in Multiple Occupation) properties. So a property with three bedrooms and a living room that can be converted would be ideal.
Holiday Season
Summer holidays can pose a problem for landlords letting to students, as it’s common for students to leave for the summer and move house every year.
However, there are these options:
- 52-week lease
By insisting on a 52-week contract you can be sure to receive monthly rent regardless of whether or not they’re using the property. But be aware that some students will be put off by this type of contract.
- 42 weeks and half rent
As most students go home for the summer, charging half the rent is an option. Assuming they vacate the property, you can use this time to renovate. It can also work for the students, as it provides them with somewhere to store their belongings during the summer.
- Student summer letting
Providing the tenants with a contract that begins and ends with the academic year (around 41 weeks) enables you to let your property to students that come to study just for the summer. Look at the summer programmes in the areas around you to make sure there will be enough demand to fill your property.
Read more articles by Jasmine Birtles here
