This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Surprising new research has indicated that students are the, ‘most reliable tenants’ for buy-to-let landlords.
The National Landlords Association (NLA) has found that buy-to-let investors who rent their property to students are most likely to receive rent on time, alongside gaining a large rental income.
Reliable
Findings from the NLA survey show that students are the least likely of all tenant types to be late with their rental payments. Only 38% of student landlords experienced rent arrears during the last 12 months. This was in comparison to 59% of landlords lending to blue-collar workers and 71% lending to tenants in receipt of benefits.[1]
More encouraging statistics from the report show that student landlords experienced the lowest amount of void periods, with less than 30% having empty properties during the past 3 months.[1] This was substantially lower than 40% of landlords who rented their property to families and 49% who let to older partners.[1]
Profitable
Results from the survey also suggest that students represent a profitable target audience for landlords. Student tenants offer a rental yield of around 6.7%, higher than the U.K average of 6.1%.[1]
Would-be student landlords are advised to do their research on the location of their prospective purchase. Generally, the better the University, the more lucrative the buy-to-let market in the area. For example, rental values in Cambridge city centre have risen by 4% over the past seven years.[1]
Students reliable…at paying bills
Moreover, non-elite University cities are also proving to be lucrative buy-to-let regions. A study by Spareroom.co.uk showed that the average price of student house and flat share accommodation has increased by almost 22% in the past two years. Bath has seen a rise of 12.7%, with Bristol recording a growth of 7.7%.[1]
Encouraging
Chairman of the NLA Carolyn Uphill was buoyed by the results of the survey. She stated that it was, ‘encouraging to see such positive figures reported by landlords who let to students.’ She warns however that, ‘letting property to students, indeed letting to any tenant group, is not an easy win.’[1]
Uphill continued by saying, ‘as a student landlord myself, I know that it can be very hard work and requires the investment of time as many of your tenants are living away from home for the first time. It is this dedication to the relationship that makes letting to students so rewarding.’[1]
By way of advice, Uphill said that, ‘as with all tenancies, it’s important to establish a good, professional relationship from the start.’ She moved on to say that it is also, ‘essential,’ that landlords set out, ‘fair terms,’ in the tenancy agreement. This, Uphill believes, ensures that, ‘both landlord and tenant fully understand their obligations throughout the tenancy.’[1]
[1] http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10282796/Students-most-reliable-tenants-for-buy-to-let.html
