Students are a core section of the rental market, but there are a few things you need to know before you start browsing private house sales in your nearest university town. If you're going to become a landlord to students, you have to be prepared to take the pros and the cons in your stride.
- More money – when you rent a property to students you rent out each room individually. Some landlords even convert the living room into an additional bedroom, a move that wouldn't work if you were renting to couples or families.
- High demand – if your property is near the campus you'll have plenty of would-be tenants jostling for a room.
- Less picky audience – there are exceptions, but as a rule students aren't fussy about the decor.
- Long term prospects – rental returns are generally high (as much as 9% in some areas) and, unless the campus moves, you'll have a steady stream of potential new tenants each autumn.
- Empty summers – you might find yourself with an empty flat during the summer months, with no more student renters around until autumn. However, you could advertise your property as a holiday rental for those months. This can be a profitable move, especially if the university town you've chosen is Edinburgh: during August, when the festival is in full swing, accommodation prices skyrocket.
- High turnover – while you might get lucky and have the same students in your property for three or four years, you're more likely to have people coming and going every summer and autumn. This can be quite hands on, involving room inspections, dealing with deposits and finding new tenants. Of course, you can hand the latter responsibility over to your current tenants: they'll want to find somebody they get on well with.
- High maintenance – when they're not at classes or studying, students like to party. Having too good a time can result in property damage. However, wipe-clean floors and affordable furniture should keep your repair costs low.
While there are downsides to renting to students, there are also a number of workarounds landlords can use to ensure maximum profit.