Students are one of the biggest markets for private landlords and few should be surprised this is so. Few, if any will own their own homes unless they are mature students, while most young people go to a university away from their local area and only so many will need, want or be obliged to spend their time in halls provided by their college.
As a result of these factors, 40 per cent of the student population lives in private rented accommodation and this means there is huge potential for landlord investors. Indeed, demand remains high despite the fears raised over increased tuition fees. A report by property advisor CBRE recently noted that student rental property had a capital value of £740 million in 2011, due to the increasing rents and high occupancy levels.
Prepare to succeed
That said, nobody should take success for granted. As elsewhere, good preparation is important to ensure success.
Research is the key. No two university towns are the same. Some institutions are located in big cities and some in small towns, many share the area with other universities and colleges, which can mean even more demand.
The first thing to check, therefore, is the most popular area for students in each town. These are likely to be close to the campus, have good transport links and also a number of other things students like to be near, such as pubs, clubs and retail outlets that offer student discounts.
It should also be noted that there can be shifts in the centre of student gravity. In Manchester, for instance, the increasing popularity of city centre living has seen a large rise in the number of undergraduates heading for the district, according to freedom of information data obtained by the Manchester Evening News earlier this year.
This has come at the expense of districts on the south side of the city like Rusholme and Fallowfield. What this example shows is that research should be as up-to-date as possible.
Check the competition
Landlords should look at other factors too. The local economy is one for various reasons, not least because student digs would be handily located if they are near major employers of part-time and weekend workers, since many students take on such jobs to supplement their finances. It is also important to look at what other student landlords are doing. Are they focusing on modern, city centre flats, or on homes of multiple occupation? Where are they investing? A look at the local papers or websites where such lets are advertised will provide plenty of clues.
The importance of insurance
As with any lets, it is vital to have landlords’ buildings insurance. It is important to ensure the property is covered against issues such as damage caused if a party gets a little too lively. However, it matters just as much to ensure the students are also covered well. Many of them could have expensive and essential equipment in their rooms that is used in their studies, b such as memory sticks and files, paper documents, scientific equipment or musical instruments.
The best thing about having student lets is that there will always be demand for them. Moreover, occupancy is predictable, being tied to term-times, rather than being something that can end suddenly and unexpectedly when an individual moves area to take a new job or gets on the housing ladder. Students have enough to focus on with their studies, so the provision of good, stable rental accommodation is something they will be glad to make the most of.