January 16th, 2017
One of the biggest decisions landlords face is whether to furnish student property.
The number of university students in the UK has substantially increased in recent years with a total of 535,200 people entering UK higher education in 2016. That is a 0.5% increase in entry rates since 2015 but a 3.7% increase since 2014, as stated by a UCAS report. With student properties providing high and solid yields, and there being a big imbalance between supply and demand, it remains an attractive market for buy-to-let investors.
Many landlords are unsure whether to furnish or not to furnish their student properties. Furnishing the property will increase its rent and value will be added as most students are willing to pay more for a furnished property. But before rushing into buying furniture, think carefully about the added repair and renewal costs of the furniture and research the area for other student properties. If there are barely any unfurnished properties around the area, having an unfurnished or part-furnished student property could attract prospective tenants looking for that type of accommodation.
Demand for furnished student accommodation
For landlords that are focusing on renting out Houses in Multiple Occupation (HMOs), having the student property furnished is advantageous as most students tend to rent flats in groups of three or more. Additionally, most of these students are short stay tenants and only rent a flat for a short period while at university. This type of tenant would prefer to pay a higher rent than to go through the hassle of buying furniture. As mentioned before, making sure there is not a high supply of furnished properties in the area is crucial unless a landlord is confident that they can take on the competition.
Costs of furnishing a student property
With the increase in tuition fees, student accommodation expectations and demands have increased. It will cost a bit more than before to furnish the property and satisfy their needs and expectations. It can cost as little as £1500 to fully furnish a two bedroom student property if sourcing the furniture correctly. In addition to this, there are also renewal and repair costs. Not every student will be as clean or as tidy as the landlord expects them to be and they can go through furniture quite quickly. To tackle this issue, it is best to purchase sturdy yet modern looking furniture which is inexpensive to repair or renew. Tatty and grimy furniture is off-putting for new student tenants and it will lower a property’s value.
What furniture should landlords get?
Since student demands are higher, the basic furniture might not be enough and it might be a good idea to invest in extra pieces, without cluttering the place, to appeal to student tenants. A survey by SAPA was conducted on 500 tenants in 2016 with the purpose of finding out what students want in their accommodation:
• 89% security
• 88% WiFi
• 76% washing machine
• 72% near campus
• 59% high quality accommodation
• 47% proximity to amenities
• 42% superfast broadband
Having double locks on doors and a secure location, including a good internet service provider (ISP), can go a long way. It is best to research which ISPs are best for the area where the property is located.
59% of students want high-quality accommodation and thus, furniture wise, it is best to go a little bit over what is necessary. You will want to make sure that the property contains the following:
• A double bed and mattress (preferably with underneath storage space). Students prefer having a double bed for multiple purposes such as using it for a movie-marathon with friends or as a gossip pad;
• A wardrobe and a bedside table. A chest of drawers would be advisable for larger rooms;
• A medium-sized desk and a comfortable office chair;
• A good mix of sofas and chairs;
• A dining table with a minimum of 4 chairs, since most students enjoy bringing friends over for lunch or dinner;
• A washing machine;
• A fridge freezer;
• A cooker;
• Ideally a microwave, with a kettle and a toaster being optional. But it is best to avoid buying most electrical appliances, as the landlord is responsible for repairs if they are faulty;
• An ironing board, vacuum cleaner and/or a mop and bucket would be advisable;
• A wall mounted mirror in the bathroom.
Make sure that all the furniture is hard-wearing, easy to clean and cheap to replace. Items such as kitchenware, crockery and desk lamps can be bought by students, as it is cheap and easy to transport. Nevertheless, landlords might purchase a cheap set of kitchenware and other necessities, to add value to the property and increase their competitive edge in the market. Students have a keen eye on properties that are ‘complete’ and meet their every need. Most importantly, do not forget to do an inventory check to certify that everything is there and intact at the end of the tenancy.