Mistakes not to make when renting out to students
With attractive yields and reliable tenancies, the appeal is obvious. Student tenancies are often arranged early, well before the start of the academic year and while chasing rent from a group of young people with no income can be off-putting, invariably, collection is easily arranged and students come with guarantors in the shape of their better-off, more-reliable parents. “Landlords of good student houses have a guaranteed market that remains predictable whatever is happening in the economy and the wider property market,” says Charlotte Vermaak Chas Everitt Nelson Mandela Bay principal. “In Summerstrand for instance, gross yields can be in the region of 10-11 per cent and many people are using a student portfolio to create income in retirement rather than rely on pensions.” Even if the student market is the best option it takes a lot of work to get the property and the location right. Start investigating sold house prices and speaking to local rental and estate agents to get a clear idea of rental yields and tenant profiles. “You need to understand local economy drivers and tenant demand before finding out if there are any upcoming changes that could impact future demand for student accommodation from private landlords,” adds Vermaak.
What to look for
Newer or modernised properties are easier to maintain and functional is the key word. So think plain paintwork, hard-wearing flooring and basic, robust furnishings. Position is less important to students, so while being close to campus and easy access into town is crucial, being on the best road and in the best area isn’t. “Students won’t reject houses because they’re on a busy road, or have a bad view, they will reject them if they’re difficult to get to, or cost more than the norm,” adds Vermaak.
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