A guide to student accommodation for landlords

A recent study found that two thirds of landlords and agents expect to have their student properties let by the end of May. Interestingly enough, 68% of those surveyed said they would rather let to students than non-students.

It is clear that the student lettings market has become ultra-successful and with that it has become ultra-competitive. For any landlord thinking about entering the student market there are plenty of things to think about and now is the time to act ahead of the new academic year, starting in September.

Letting your rental property to students can be a very lucrative move. For one, you are pretty much guaranteed a regular stream of income as the student demographic is reliable and consistent. As well as this, the pool of potential tenants is replenished at the start of every academic year, making the chances of filling your property very high.

There are, however, some downsides for landlords going down the student accommodation route. Using our experience as estate agents working all across the South of England, we outline what some of these pros and cons are.

Pros

If your property is in a large university town or city, you shouldn’t have too many issues sourcing tenants. Demand for student accommodation will nearly always outstrip supply, which means your investment should be fairly secure from a financial perspective. Rent money coming in on a regular basis, something every landlord seeks, is a big likelihood in this market.

Students might be a little more particular about where they live nowadays, but generally speaking they will be more flexible and less picky than certain other demographics. They won’t care so much about sparkling décor or brand new fixtures and fittings. If your property is structurally sound and requires no essential or emergency maintenance, there should be no issues in letting it out as it stands. This will obviously save you money on redecorating/refurnishing costs.

Additionally, being able to rent each bedroom individually is likely to secure you a higher profit margin than if you rented the property as a whole. The living room could even be transformed into an extra bedroom if required. This can all lead to a fairly substantial rise in rental income.

Student rental prices have been on the up for quite a number of years and this trend isn’t predicted to change anytime soon. As such, investing in this area of the property market is one of the less risky options for a landlord.

Cons

Given the age of most students, it might be quite tricky to get references and credit checks. This, of course, leaves you less covered if damage is caused or problems arise (things that are not uncommon in student digs). For added protection, it’s often worth asking for a guarantor to give you extra peace of mind.

A bit of wear and tear in student accommodation is inevitable. As a result, you will probably have to carry out more maintenance than if you were letting to professional tenants. The horror stories regarding the living standards of students are often exaggerated, but they aren’t likely to be the most house proud. This is an important thing to bear in mind if you are thinking of renting property in this marketplace.

Arguably the biggest disadvantage of student accommodation is the hard to swerve void periods. Although demand for student houses is mostly very high, this demand is also intrinsically linked with the university timetables. Universities have long summers and most students will return home during this time – as a natural consequence of this, it will be harder to fill your property and you may be losing more money than you’re making. One possible way of countering this is to charge a holding fee for students who wish to live in your property for a second or third year, but this is far from infallible.

University hotbeds

At ChimneyPots we cover a number of large and small university towns and cities. Southampton and Portsmouth have significant student populations, whilst Winchester and Chichester have smaller but still substantial numbers in this demographic. Plenty of people studying at these institutions will be looking for somewhere to live, making these areas ideal for investment in student accommodation.

For further advice and guidance on letting your property, please contact us on: 0844 809 993. To find out how much your property could be worth in monthly rents, you can use our instant online valuation tool.

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The downsizing revolution – Pros and cons for property sellers

Downsizing is a trend that is currently very much in vogue, particularly among the over 55's and retirees whose children have flown the nest and who now have less need for extra space and bedrooms.

Put simply, downsizing is when people move from a larger house to a smaller abode – so, for example, from a detached house to a bungalow or a townhouse to a flat. This is usually for financial reasons, as moving from a bigger house to a smaller house is a good way of saving money.

The act of downsizing has become a major part of the sales market in recent years. It’s important to bear in mind that there are both pros and cons to this growing trend, though. Below, using our experience as estate agents working all across the South of England, we outline what some of these are.

The Pros

In these more austere times, where the cost of living is outstripping wages for many, the benefits of a smaller house speak for themselves. Lower utility bills, lower maintenance costs and lower mortgage repayments will all help to leave you more financially secure while also freeing up extra funds to spend on various recreational activities. In fact, Lloyds Bank’s Downsizer Report for 2014 showed that those downsizing from a detached to semi-detached property freed up an average of £121,686 and those moving to a bungalow from a detached home raised an average of £103,715.

Additionally, downsizers have the advantage of less housework and not having to worry so much about the upkeep of large gardens or big heating bills.

Downsizing is also the perfect excuse to declutter. As well as being a therapeutic exercise, it will also allow you to get rid of all those unnecessary items that haven’t yet made it to the charity shop. With less space in your new house, you’ll have to be discerning about what you take with you – this is a great way of working out what’s worth keeping and what isn’t.

The Cons

Moving house can often be a very expensive undertaking, with stamp duty, conveyancing quotes and costs and estate agents’ fees to be factored in. This can, in some cases, significantly reduce the amount of money downsizers make from their transaction.

Furthermore, a smaller house means a more confined living space. You’ll have less room for your belongings and will have to adapt to more restrictive living quarters. Whilst this isn’t the end of the world, it could have an effect on your ability to entertain or accommodate house guests. For people in or reaching retirement age, this is quite a big consideration to bear in mind.

Downsizers may also suffer financially in the long-term. There are more people downsizing than buying larger homes and there is a dearth of people looking to get on the property market, which means that downsizers might have to accept less than their asking prices when they trade up.

Lastly, those eager to downsize need to consider the emotional ties that come with moving house. Downsizers are likely to have lived in their property for quite a while so the strain of leaving a beloved house should not be underestimated.

Prospective sellers need to think carefully and weigh up all the costs before they decide to downsize. You need to ask yourselves the following questions: will we have enough space for our possessions? Are we going to miss the extra space provided in a larger house? Will we be worse off in the future?

Please get in touch with ChimneyPots Estate Agents on 08448 099931 for advice on buying and selling property. What’s more, you can find out how much your property could be worth with our instant online valuation tool.

http://chimneypotsestateagent.co.uk/