Letting to Students

If you are looking to buy to let out student accommodation or student accommodation housing then it is important you consider your students market carefully. It is likely you will be in competition with the student halls of residence in the UK. That said, there is an increased number of UK students nationwide demanding short term, off campus student accommodation. There is often not enough on-campus accommodation to cater for the huge increase in the number of students now going to university. In the past, this has forced students to seek local private student rental accommodation (increasing demand for buy to let property / driving property prices higher). This trend is likely to continue as the Government encourages students to go to university.

Cheaper student accommodation (shared or student type housing) that will typically pay a higher rental yield. Be aware that these properties will typically not appreciate in value as much compared to other types of housing; so the type of property you purchase must reflect your investment goals � income (whether immediate of future) or capital profit. Students typically share accommodation in order to reduce individual costs. Consequently, as a group of sharers students can produce higher than average gross yields for landlords. Student sharers primary concern is the use of the accommodation during term time and will dislike renting outside of term time. If you cannot fill this void then consider short-term lets or foreign students or work placements. Of all the 'target groups' they are likely to be the highest maintenance in terms of wear and tear on furniture and fittings � this is mainly because they are young, have come straight from home and have not been responsible for owning and caring for an accommodation before.

Wear and Tear - students will naturally create more usage and wear and tear on the fittings and accidents and breakages will be more frequent (compared to a professional couple for example). Students are much more willing to accept a lower standard of furniture and fittings, for the opportunity of lower rent (as a group). They will obviously require accommodation as close to campus as possible and close the local amenities � bus stops, train station, shops, launderette and not forgetting the pub! The overall quality of the property need not be superb � there is no point equipping it with a state of the art kitchen and bathrooms. Economy, cleanliness and simplicity are key with students. Larger, older accommodation with as many bedrooms as possible are ideal. Think about converting a spare lounge to a bedroom to maximise the yield.

Mortgage lenders are a bit nervous about students and some exclude students from the residential housing accommodation mortgage policies altogether. It is advisable to have one tenancy agreement that states that if one of the group leave, it is up to others to replace the shortfall by finding another flat mate. In addition, when vetting prospective tenants, traditional credit referencing does not apply as they are unlikely to have much of a work history � instead you must ensure they provide a guarantor; someone who will be responsible for their deposit and potential dilapidations to your letting accommodation.

References may be a problem � they are unlikely to have an employment history, previous landlord or banking history. In this case you should ask your prospective tenant for a guarantor � this is a person that accepts financial and legal responsibility for the prospective tenant. This heavy burden is usually placed on their parent�s shoulders or a close family friend.