How to become a student landlord

Becoming a student landlord can be a profitable venture due to high demand for student accommodation and above-average rental yields.

There are many properties that lend themselves to student properties, not just because of location, but because of things such as equally sized bedrooms and superfast broadband. Letting to students can be a very savvy business choice and generate further revenue, but there are certain differences that landlords need to be aware of between the needs of professionals and students.

The timelines for students are slightly different, and the student property market works in annual cycles. Properties need to be marketed from October; however, the peak interest period starts in November for tenants to move in the following summer.

Here’s our guide to help you navigate the process:

1. Understanding the student rental market

• Demand: The number of university applications remains high, creating a stable demand for student accommodation.
• Annual cycles: The student rental market works on a yearly cycle, with students typically looking for accommodation from October to January for leases that start the following summer.
• Short-term needs: Students often rent properties for a fixed academic year, with many returning home during summer.

 2. What students look for

• Location: Proximity to campus is crucial. Many students prefer to be within a 20-30 minute walk of the university, as parking options are limited.
• Quality: High quality lettings are more desirable. Features like ensuites, fast internet, and modern interiors make properties more attractive and enable higher rent.
• Spacious bedrooms: Equally sized, large rooms are appealing, especially for groups of students sharing a house.
• Safety and comfort: Ensure the property is safe, clean, and well-maintained to compete with purpose-built student accommodation (PBSA).

3. Legal and regulatory considerations

• HMO Licensing: If the property will be shared by five or more students, it may be classified as a House of Multiple Occupancy (HMO). You may need a license, depending on local regulations, and certain planning restrictions may apply.
• Article 4 direction: In areas with high student populations, some local authorities may limit new HMO conversions under Article 4 Directions, which requires planning permission.
• Periodic tenancies: The government is introducing reforms that shift from fixed-term contracts to periodic tenancies. This could challenge the traditional student rental cycle, but measures are being introduced to maintain the yearly turnover of tenancies.

4. Financing your student let

1. Standard buy-to-let: For properties with up to four tenants. 

2. HMO Mortgages: For properties with five or more tenants. These tend to have stricter requirements and may need landlord experience.

• Mortgage lender requirements: Not all lenders accept student lets, and some may not allow family members as tenants. Speak with a mortgage broker to explore your options.
• First-time landlords: Some lenders offer products for first-time landlords, but most prefer applicants with prior experience in letting properties.

5. Preparing the property

• Initial investment: Refurbishments to modernise the property—adding ensuite bathrooms or upgrading Wi-Fi infrastructure—can help you command higher rents and reduce vacancy rates.
• Marketing: Start advertising in October, as students begin their search early in the academic year. The second wave of interest comes in January.
• Tenancy agreements: Ensure you have a robust tenancy agreement, with clear terms, to handle issues like damage and deposits.

6. Navigating the market changes 

• Rental reforms: As the market shifts towards periodic tenancies, it's important to stay informed about new regulations and adapt your strategy accordingly. The government is planning to introduce measures to support student landlords, ensuring that properties can still operate on a yearly cycle.

By carefully considering location, property features, and financial arrangements, you can make student letting a highly rewarding investment. However, staying updated on changes to regulations and understanding the specific needs of student tenants will be key to long-term success.

There are plenty of concerns raised by landlords when it comes to student rental properties. However, with over 15 years of experience and a host of student rental specialists in our team, Andrews will take care of everything from referencing to right-to-rent checks; easing the pathway to student landlord success.

‘As a landlady managing a portfolio of student properties in Gloucester, I needed an agent who truly understands the intricacies of student tenancies and the complexities of Houses in Multiple Occupation (HMOs). Andrews has been an absolute pleasure to work with, and my tenants have nothing but positive things to say about them. In the student rental market, it’s crucial to have an agent who not only comprehends the challenges of HMOs but also knows how to effectively engage with younger tenants. Andrews consistently go above and beyond, providing exceptional support that truly lightens the load for me as a landlady.’

If you are interested in letting a property to students, contact your local Andrews branch today.