If you're thinking about becoming a student landlord, then you might be asking yourself whether it will be more trouble than it's worth. Here, we take a look at five top reasons why letting to students can be a very lucrative investment and less hassle than you might think.

The rise of students 

The turn of the century saw a huge increase in the number of 18+ year olds applying to further education, rising from 15% in the 80s to over 50%*. Not only has domestic intake increased, but the rate of international students saw a considerable rise of 10%. Overall, in 2018, there were 2.34 million university students in the UKꜗ – a huge potential market!

A recurrent market 

One of the distinct advantages to student renting is that it's in a recurrent market – every year, you are guaranteed to have the latest student intake searching for housing. The fact there is such high demand for high quality student housing close to campus means landlords with quality housing are almost, if not guaranteed, to fill their rooms. Most students arrange their accommodation by the end of the first term for the next academic year, so landlords can expect low voids and can plan well ahead. 

International students bring the dollar… and yen…and euros 

As mentioned, international students have been a growing proportion of the overall market, earmarking UK universities as an attractive destination to enter and complete higher education. In comparison to domestic students, international students tend to come from wealthier backgrounds, with a degree costing them anywhere up to £58,000!** As a result, they will often have a more generous accommodation budget. However, one thing to note is that this is bound to come with a higher expectation around the quality of accommodation. 

If you are considering letting to international students, it would be essential to work with other organisations that specialise in marketing towards an international clientele. For example, many universities will offer international students assistance in finding accommodation, so forming a relationship with a relevant institution would be vital.

The more, the merrier 

One of the most important aspects of student life is sharing accommodation with friends. Students are actively looking for house-shares and landlords can adapt their accommodation to make it suitable for multiple occupants, often achieving a higher overall return than possible if renting to a couple or a family. Remember though; if you do decide to have multiple occupants, you need to make sure you follow the relevant HMO regulations and licencing requirements.

Low risk and high yields 

A common misunderstanding about renting to students is that there is a high risk of non-payment. This would be a legitimate reason not to rent to students if it were true. However, most landlords require a parental guarantee, and if you space the rental payments to three times a year to coincide with the time that your tenants get their student funding, there should be no concerns on late payment. In addition to this low risk, students are known to generate attractive rental yields. In fact, cities with several universities have the highest rental yields of all – cities such as Nottingham and Liverpool which boast seven universities and a student population of 107,000῀ between them.

Find out more

If you’re interested in the world of student buy-to-let, then why not take a look at some of our other student landlord blogs for some great tips? 

Discover the best locations for student buy-to-let properties, some top tips for renting to students and why it pays to be prepared! 

If you’re ready to take the next step, Paragon can help. We offer an extensive range of buy-to-let mortgages suitable for single, self-contained units, houses in multiple occupation and multi-unit blocks. Find out more about our buy-to-let mortgages - available via our network of mortgage intermediaries. 

BBC* 

https://www.bbc.co.uk/news/education-49841620 

House of commons libraryꜗ 

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7857 

The guardian** 

https://www.theguardian.com/education/2018/apr/05/university-applications-fall-despite-surge-in-foreign-students 

TotallyMoney ῀ 

 https://www.totallymoney.com/buy-to-let-yield-map/ 

*This blog is correct at the date of release. Some of the information linked to this post has been sourced from 2018; therefore, there may be some changes in data.