Renting to students can be an overlooked investment strategy for landlords, especially those with properties close to universities.

There’s plenty to think about with student letting.

There can be more regulations and responsibilities to consider depending how many students you can accommodate, and there’s potentially the issue of having empty premises over the summer.

But if you get it right, renting your property to students can bring in plenty of return for relatively little fuss.

Throughout this blog, the reputable letting agency Easylet explain the different types of student rentals, the benefits of student rental investments and any potential drawbacks to consider.   

What are the different types of student rentals?

In the UK, there are three student property options for investors:

– Houses of Multiple Occupancy (HMOs)

– Private rented accommodation

Purpose-Built University Accommodation (PBSA) is a form of student rental; however, it is a much larger investment usually undertaken by firms.

Houses of Multiple Occupancy (HMOs)

A property becomes a HMO if it has at least 3 tenants (most have a maximum of 6) from more than one household who share a toilet, bathroom and kitchen.

Typically, HMOs are terraced houses found further away from the city centre, making them more affordable for students to rent and investors to buy.

If you decide to invest in an HMO and become a landlord, you’ll need to obtain an HMO licence.

Private rented accommodation

If you rent a private residence to two students or fewer, it is known as privately rented accommodation. 

These residences are similar to HMOs, however, they have fewer tenants.

The benefits of investing in student rentals

There is much profit in the lucrative student accommodations rental sector. The benefits of student rental investment include the following:

High rental yields – unlike standard letting, you receive weekly/monthly rent from all the residents letting your property, which enables you to enjoy a high-rental yield, sometimes up to 20%.

Even if a student refuses to pay, a signed tenant agreement means a guarantor must cover those costs, so you don’t lose out. This agreement must have been agreed upon before the contract was signed by the student and guarantor.

High demand – due to the expansion of universities, more domestic and international students are seeking accommodation.

Long-term investment – with a new influx of students looking for accommodation each year, your property is less likely to be empty.

Are there any drawbacks to student rentals?

Student rentals have plenty of benefits, however, there are a few considerations to keep in mind including:

  • Damages and contract violations – although damage can occur in standard rentals, students are more likely to throw parties frequently, potentially leading to noise complaints and damage to your property.
  • Keeping on top of noise complaints and repairing damages requires attention, money, and time you may not have. 
  • Annual gas inspections are required by a gas-safe registered engineer to ensure gas pipe work and appliances are safe to use.
  • Electrical installation inspections need to be booked every five years to ensure electrics are running safely.
  • Annual checks for legionella are also a legal requirement – legionella is a dangerous pathogen found in housing water systems that can cause pneumonia.  

If you decide to invest in an HMO, as a landlord you will need to consider additional legal responsibilities.

An HMO landlord is required to:

  • Ensure bathroom and kitchen facilities are adequate for the number of residents.
  • Follow fire safety measures – HMOs are more at risk of fires than standard lettings, so more fire alarms, fire doors, blankets and fire extinguishers are needed.

Is investing in student rentals worthwhile?

On the whole, student rentals are an incredibly profitable investment. If you have the dedication, energy, and time to successfully monitor your property, letting student accommodation is incredibly worthwhile.

If you opt to invest in student rentals, trusted letting companies offer let-only services that provide you with everything needed to start leasing your student accommodation and making a profit.