Renting to students could be a very lucrative decision. If your investment property is near a University or Polytech, you may be able to attract many student renters. While renting to students is not for everyone, it is good to consider all the potential gains and drawbacks before making the final decision.
Pros:
- Student properties normally fetch higher yields and rental returns.
- Landlords have a guaranteed market with high demand, healthy competition and predictable tenancy lengths (Hopefully, border closures are well and truly behind us)
- Whilst turnover is high, vacancy rates are low. Minimal advertising is normally required with plenty of applicants ready to fill the space.
- Student tenants are less fussy. Their expectations are not as high as non-student renters. They’re happy to accept the most modest appliances and simple décor.
- Students' rents are often not only covered by their employment but by their parents, and government allowances, which means your rent payments may be guaranteed by a reliable third party.
A UK Study found that student tenants are the least likely of all tenants to miss rental payments. Who knew, right?
Cons:
- Properties tend to suffer more wear and tear due to the short term nature of tenancy.
- Most student accommodation rentals are fully furnished.
- Student lifestyle may cause some problems like partying and noise complaints.
- Potential for inconsistent rent payments. Unfortunately, immaturity and lack of money management experience can be a bad combination.
Consider adding a Rent Guarantor to the agreement if you're worried about inconsistent rent payments.
What do students look for in a Rental Property?
- Fast WiFi is probably the most in-demand amenity. So, consider offering it for free or including it in the overall price of your property.
- Good location. It’s not only the distance to University that counts - students would also prefer a central location, close to bars, cafes and shops.
- Functional layout is important if you’re considering renting multiple rooms out (separately or together). Students need their own personal space with a desk where they can study, as well as a well-maintained communal room where all the flatmates can get together.
- Most students expect a washer and a dryer.
Having a rental property in the University area could be a great investment. If all the pre-tenancy checks are done, you can take advantage of many benefits renting to students has to offer, as long as you’re willing to take some risks.
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.
