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How to get the best student tenants

How to get the best student tenants

The student housing sector is growing all the time. The latest reports from CBRE place the total value of investment into student accommodation at £4.86bn in 2017. The performance from Q1 2018 was even better, with £975m of sales recorded.

Jo Winchester, head of student accommodation at CBRE, said: “Student accommodation continues to perform well, attracting large scale investment from all types of investor, but with the market dominated by larger operator purchasers and portfolio sales”.

With rents in PBSA also up by 2.98% nationally over 2017 – almost double the national average for residential rents – it is clear that this is an extremely good time to be investing in student accommodation.

However, the competition is hotting up, and it is vital that landlords take into account how to ensure they get the best tenants. Here are a few things to be prepared for:

Ensuring legality

You do not want to invest in a student property only to find out it is not legal to rent it to tenants. For instance, if you have invested in a shared house in multiple occupation (HMO) you will have to obey the Housing Act (2004) which includes many stipulations like a minimum room size of 6.51 sqm.

On top of all the regular requirements such as getting gas safety checks and an EPC, you will also need to obtain an HMO license, and the local authority will often have separate standards for things like bathrooms, kitchen and work spaces.

Make sure that your prospective investment meets the required standards before purchasing.

Will bills be included with the rent?

For many student tenants, their university home will be their first time renting. There will be lots for them to take care of, and a student home where bills are included with the rent will be extremely appealing to many – even if that means the overall rent is higher.

If you have the time and inclination to organise bills yourself and package them up with the rent you are more likely to rent your property out and start earning income. If you can calculate it over the term and put everything together in one lump sum to be timed with student loan payment, even better.

Location

This is an obvious, but important, point. Location is always key with property, but especially with a student investment. There needs to be easy access to the university and its related facilities, otherwise you are likely to have trouble renting the property. Many students will not go to university with a car or other personal transport, so proximity to public transport or the university itself will always be a point in your favour.

Consider a purpose-built unit

The aforementioned HMOs are a simple, common option, but some of the strongest growth in the sector can be found with purpose-built apartments in specialist student developments.

Students love these developments as they tend to be conveniently located, have great on-site amenities – such as a gymnasium and dedicated study spaces – and have clear payment plans from the management companies.

For an all-in-one investment package which is likely to be reliable and have real longevity, it is hard to look past purpose-built accommodation developments.

If you would like any further information on available investment opportunities, please get in touch with our team today