Student accommodation is a significant aspect of university life and represents a substantial portion of a student's expenses. From shared buildings and communal halls of residence to private student lets and large houses, the variety of options present a distinct set of challenges and benefits for landlords, estate agents and facility managers.
Beyond attracting tenants and letting properties out, the pressure today as much to provide low-maintenance and secure accommodation so that tenants can study in safe and high-quality environments. Due to a reported student housing shortage and limited choice, most cities have more students than places to fill available. There is a balance to be found when investing in student accommodation to keep on top of maintenance to ensure that the property’s interiors, furnishing and its general state of repairs are up to scratch.
This article is for responsible landlords and property managers with a portfolio of student lets or an agency, and explores the complexities, positives and diverse nature of managing student accommodation.
Understanding the supply and demand of student lets
Students and their parents - ‘the Bank of Mum and Dad’ - are realistic about funding student accommodation. While some might invest in property as part of their long-term wealth management plan, others will agree to pay for rent during term time or throughout the year. In doing so, students and their parents (who are usually the guarantor) expect high standards in the accommodation they are paying for, be that communal, shared or an independent room.
Student accommodation does differ from other types of rentals due to the transient nature of its student occupants. With the UK having too many students and not enough accommodation, finding suitable accommodation can be difficult to find in larger university locations, such as London and in popular university towns. This is the unfortunate reality in Bath and Bristol, where the costs are much higher because supply is so low. In recent reports, students were being urged to look for accommodation in neighbouring areas, such as Cardiff and parts of Wales.
Despite the low stock of accommodation, increasing costs and scarcity of student digs aren’t always the only factors to consider. Rents can vary depending on the location and type of properties available in particular places. For instance, a weekly student rent might cost from £80/week in the north to £120/week in the south east. From a landlord’s perspective, other variables will be the ongoing expense of maintenance, of using a property manager or management company to oversee your shared building and student halls.
Being proactive in the academic year
Each academic year sees a turnover of tenants so being on top of end-of-tenancy agreements and contracts means being proactive. In this way you can ensure consistent occupancy rates, although effective marketing will help to capitalise on term timings and mitigate for empty properties in quieter periods. However, with the shortage of students mentioned, getting students into properties is not the main challenge. Instead, it’s about attracting the right students.
Landlords and agents will feel reassured letting their properties to respectful, sensible and mature students who are more likely to look after that property. In this sense, it might be wise to set up and market a student property to command a higher rent than you might initially think. Likewise, attracting wealthier international students, who are often willing to pay premium rents, presents a great opportunity for landlords to maximise profits. Higher quality expectations: International students often expect higher quality accommodations, presenting opportunities for landlords to invest in and upscale properties.
Students do often have different expectations and lifestyles compared to traditional tenants, so a tailored management approach is still needed. Having said that, in addition to the points mentioned earlier, there are further positives for having student lets, including:
- Regular and predictable rent: Students typically search for accommodation towards the end of the term and move in at the start of the academic year, providing landlords with a regular income.
- Low financial risk: Students often have guarantors (usually their parents) and receive subsidies through student loans, reducing the financial risk for landlords.
- High rental yields: Student properties offer high rental yields, making them financially attractive compared to other rental investments.
- Profitable Shared Accommodation: Shared accommodation and Houses in Multiple Occupation (HMOs) are common among students, allowing landlords to charge more per room and increase profitability.
Greater flexibility
Unlike long-term leases in residential properties, student accommodation often involves shorter lease terms aligned with the academic calendar. This necessitates flexibility in lease agreements to accommodate varying study durations, holidays and early exits. Landlords and estate agents must navigate these complexities.
There is, however, the potential for long-term tenancies to come as a result of their short-term lease. Some students may require accommodation for the duration of their academic course providing landlords with a greater potential for long-term tenancies.
Safety, maintenance and repairs
Ensuring safety is paramount in student accommodation and implementing robust security measures and emergency protocols is crucial to safeguarding the wellbeing of residents. Keeping the access and locks on doors (and windows) secure in all communal areas will be a key concern if you’re in charge of accessing communal areas. For anyone managing communal student halls and buildings, it’s crucial to ensure that doors open and close properly. Maintaining the locks and organising an easy key tag system to replace keys to flats and student rooms is also an ongoing priority. Students are generally even more prone to misplacing their keys than other tenants!
Typically, students let furnished units with essential amenities such as high-speed internet, laundry facilities and other mod cons. In some cases, having ensuite bathrooms in student halls and communal areas are highly sought after in university towns and cities. Due to their student rooms or houses being furnished, there is a higher rate of wear and tear (and therefore upkeep) compared to conventional rental properties.
Regular maintenance checks and prompt repairs are important throughout the academic year to help your property retain its value and to prevent more serious (and costly) problems occurring further down the line. Facility managers play a vital role in coordinating maintenance schedules, managing services and ensuring student accommodations are always in compliance with current health and safety regulations.
Compliance with regulations
Student accommodation management necessitates a greater adherence to specific regulations and standards governing rental properties. Fire safety regulations to HMO (House in Multiple Occupation) licensing requirements, landlords and estate agents must stay abreast of legal obligations to avoid potential penalties and liabilities. While universities might communicate their fire hazard and safety rules and advice to keep students’ safe, it’s good to circulate and emphasise these as often as possible. Regular inspections and compliance audits are essential to ensure the property meets regulatory standards.
Managing student accommodation presents a distinct set of challenges along with positive opportunities for landlords, estate agents and managers. By understanding the unique dynamics of student lets and prioritising their welfare, property professionals can ensure the long-term maintenance and profitability of their investments.
Proactive management practices are also key. With knowledge on managing different types of properties and with management assistance, you can help to minimise problems, prevent potential safety breaches and ward off costly repair jobs.