Students make the best tenants: Now it’s official!
James Villarreal, CEO at Glide, the utilities and service provider for students, reveals why students make the best tenants.
As a landlord or letting agent, students may not be your first choice of tenant, but our view of students is quite different to the image often portrayed in the media. Rather than voice our own anecdotes we partnered with Accommodation for Students to survey a sample of landlords and lettings agents who rent to students and non-students to find out if students are good or bad tenants… it turns out they are the best!
Our research revealed that 69% of landlords and letting agents prefer to let to students and 84% agree that students make good tenants.
The reasons for the distinctly positive image of students were candid enough and wouldn’t surprise too many of the landlords out there; student lets generally lead to better yields (76.5%), there is the ready annual market of new students every year (53.7%), students often have the financial support of parents or family (45.6%) and as such, rent tends to get paid pretty promptly (25%). What’s more, these views were shared across the UK, the only exception being London which at 43%, presented the lowest preference to student tenants. Just 3.7% of those surveyed reported no discernable benefit from letting to students.
Actually, the perception of student accommodation has changed a lot over the past decade, not least amongst students themselves. Gone are the days of substandard rental ‘digs’ of previous generations. Students today have a good idea of what they are looking for and they will be looking for the best properties they can.
Fortunately, there are some quick, straightforward practices that any landlord can implement which means they always have a good chance of capturing the best student tenants at the peak time when most students are looking:
Letting a property to more than two students requires an HMO license. At up to £770 per property per year (albeit much lower in some places) this can feel like a significant investment to make. Indeed, 57.4% of landlords considered this the main obstacle to renting to students. However, the license allows landlords to let individual rooms which means that the investment in a license is soon recouped.
Utilising specialist websites, such as Rightmove Students, offers an inexpensive platform for advertising your property as does the accommodation office of the local university. This is often the first place students will look!
Schedule dedicated times for group viewings. As well as viewing the property it gives potential tenants the opportunity to meet one another. If they get on then they will be more likely to stay together and to stay in your property!
This becomes of greater benefit when you have a portfolio of properties as it is simple and easy to showcase images and post availability. By being creative and dedicating a little time, you can use the hobbies and personality traits of potential tenants to engage them with one another.
Keep things really simple
Bill-sharing is a sure fire way of creating arguments and stress in a shared house. Meanwhile, landlords and letting agents who are left with the bills have a headache and an unwelcome task when it comes to sorting out these issues after students have left. By combining bills these potential concerns are avoided in advance. 71.2% of students believed rate inclusive bills were an essentially important factor in choosing a property.
While the research suggests that students make for the best tenants, things inevitably do go wrong. Make sure you have the right insurance in place to cover all eventualities.
Get the balance right
A healthy relationship between landlord / agent and the tenant is important. Set the boundaries early. It is not your job to change the light bulbs and they should all know where the fuse box is!
These tips should help landlords and letting agents looking to capture the best student tenants.
While there were concerns regarding letting to student lets such as more time consuming (50.7%), tenancy turnover (46.3%) and potential damage to the property (41.2%) the reality is that there is a tremendous amount of confidence in the student rental market. In essence, students who have good accommodation will take more care and pride in it and those with a good relationship with the landlord / letting agent will show the property more respect.
More interesting findings can be found on this infographic.