06 January 2020

If thinking back to your student days doesn’t make you even just somewhat apprehensive to invest in student accommodation as a means of rental income, then you must not have lived away from home as a student…

Why student housing is appealing
1. Higher Returns
Student rentals are often rented out per room, which can result in a higher rental return for the landlord. Since students require ease of access to campus as a priority, they are often less demanding with regards to other physical aspects of the property. Students are therefore happy to share common areas such as lounges, kitchens and entertainment areas provided the rent is affordable and the property is within easy access to campus.
2. Fewer vacancies
Seeing as there is generally a high demand for student accommodation compared to the supply provided by tertiary institutions, investing in these kinds of properties is recommendable. This means student accommodation offers low-risk option in terms of vacancies.

What are the risks?
This type of rental income does pose other risks, such as short-notice lease terminations and the possibility for neglect and damage to the property. However, this can be avoided provided the correct safeguards are put in place to protect the investment value of the property.  
1. Lack of maintenance
Have you seen your teenager’s room? Given that students might not keep the property as tidy as a family, would wear and tear is probably the biggest risk these rentals carry. You might need to employ a cleaner to ensure that the property is maintained to a reasonable level of cleanliness. Some student accommodation landlords even go so far as to employ a house manager who visits the property regularly and is on hand to assist the students if they have any problems.
2. Damage to property
Damage deposits should also be secured as per any normal rental. Considering that it is typically a parent who will sign the lease and pay for the rental, or act as guarantor for the rental and any other costs, it is advisable to also have house rules agreed to by the students, which are signed before the lease is accepted.

3. Timing the academic year
December and January will normally result in vacancies based on the timing of the student academic year. Where demand is strong and property in short supply, it is not uncommon for landlords to insist that December and January rentals are covered by the students in order to secure them the property.   

Final Advice
If you’re going to rent a property out for students and you want to maximise your return, ensure that the property is appealing to their age demographic. Wi-Fi with good streaming capacity is a must. A dishwasher, washing machine and tumble dryer are also valuable drawcards, and a good entertainment area would be an attraction too. Finally, remember to think like a parent. What features would you want to see if you were leaving your child in your property? Security is a must, with either alarm systems or security gates an absolute necessity.

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*Advice sourced from Grant Gavin, Broker/Owner of RE/MAX Panache.

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