Students

Who are they?

Usually young, free and single and short of money. So, they mostly rent in largish groups, 3's, 4's, 5's and maybe more to share out the costs and keep their individual rents low. Price is a big issue.

What do they want?

Large houses with lots of equal sized rooms. They want to spread the costs between several people but no-one wants the box room. Victorian houses with good-sized sitting and dining rooms (reception rooms) and 3,4 or 5 bedrooms are ideal. You can rent each room (including the reception rooms) individually or the house as a whole to a group of tenants. Either way, most tenants prefer to have a communal area where they can hang out, watch TV and eat although this is less important for tenants who are renting a room in a house where strangers occupy the other rooms. A house with a large kitchen with room to dine or room for a sofa is perfect as your tenants can use the other reception rooms as bedrooms. They are not too bothered about decor, especially if the price is reduced as a consequence of dated decor but still want something clean and functional. They usually require a furnished property and prefer to have a desk in each bedroom although it is becoming more and more common for tenants of all kinds to have their own beds or at least matresses.

The benefits of renting to students.

Financially: Contrary to popular opinion, in my experience, students often make the most reliable tenants, especially if you have a large house. Particularly, if you stick with students with UK based guarantors (it is difficult to enforce a legal contract with someone who is not resident in this country and therefore not present to be held accountable to this country's laws), you will most likely have few, if any, financial problems with your tenants. The guarantor will usually be a parent who is most often paying the rent anyway. I can honestly say that in the ten or so years I have worked in the London lettings market, I have never had to persue any student tenants for non-payment of rent.

Looking after your property: Again, I am generalising. Most students as I mentined above are young, free and single. Consequently, they usually do not have the kind of respect for your property that they would have for their own. This does not mean that they trash the place and besides you have a security deposit for cleaning and any issues which are not "fair wear and tear". Regardless of who you rent to, your newly redecorated property will not look newly redecorated when your tenants move out after a year of living their lives in it but it needs to in order to secure new tenants. So, what's the difference if there is a bit more wear and tear than you expected, you need to redecorate anyway. Avoid carpets, hard floors don't stain, and make sure you or your managing agent visits the property every few months to make sure no persistant act or problem is causing any damage (e.g. worn out bathroom sealant, door handles bashing the plasterwork when opened) and fix any that are.

Empty periods: Students mostly rent in their second years (after their first year in halls) and will be at university for the next year or two. So, students often offer an excellent long term rental opportunity.

The pitfalls of renting to students.

Well, as mentioned before, there is the wear and tear which is often heavier than with tenants who are at work all day and socialize in town. Also, there is the academic year which runs from roughly September to June. This leaves a three month period in the summer where students tend to go home and don't want to be paying rent for this time. This won't always be the case as your tenants may want to continue renting the property for the next year or even two but, it will happen. When it does, it is imperative that you secure new tenants for your property before all the students have found properties. The peak time for student renters is from May to July.

A note about large house buy-to-let investments.

Large houses are the hardest type of property to let and we live in a competative rental market. Very few families rent so you are pretty much limited to students and other sharers (who tend to come in smaller groups than students - 2's and 3's). I would not recommend purchasing a large house specifically as a rental investment unless you are defintely able to bridge the financial gap for the inevitable empty periods. On the other hand, the rental return is highest in this category. The space in the property can be maximized and when renting rooms separately, rental income is often high. During the last few years whilst the rental market has been tough, the landlords I have dealt with who let large houses are the only ones who have actually been making a profit (other than those who have owned their rented property for several years or more).


Cautionary note

When renting a property to "three or more households", the property is classed as a House of Multiple Occupancy (HMO) and as such may require a liscence from the local council.  You will also have to confirm to more rigorous standards than with other rental properties.  For more details about HMOs, Landlord Zone explains it well.