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Student tenants - a risk worth taking?

12th June 2007 | back to article listings BACK    print this article PRINT

While there is always the exception to every rule, the general view of students is that they have little regard for the property in which they live - with poor hygiene, late night parties and Blu Tack all over the walls.

However, one thing is clear, very few students will be able to afford their own properties and will accordingly be looking to rental accommodation, thereby providing a guaranteed, if unreliable, source of income for landlords who own properties in some areas of the country.

But are they a risk worth taking? A spokesperson for the Residential Landlords Association certainly believes they can be a great source of income - provided the wary buy-to-let investor makes sure they have taken adequate precautions against their tenants' potential for havoc.

Chris Town highlights some of the potential advantages of having a rental property aimed at the student market: "You've got them for at least a year, so it's a predictable market.

"And you know when they're going to leave as well, at the end of June - so you can plan maintenance or any improvements you might have to make."

The expert also notes that the major advantage of the student market is that they are bound by their education - therefore meaning that they could potentially be a tenant for about three years. However, Mr Town also draws buy-to-let investors' attention to a number of factors that must be considered, if the move is not to turn out to be disastrous.

"Damage is always a problem, that's why you take deposits off individual students," he remarks.

"As far as arrears are concerned, because students are young and generally don't have a credit record, you generally take a guarantee from the parent ... that would be something that's pretty much essential."

However, those landlords with a deposit in place must still be aware of new legislation brought about by the tenancy deposit scheme, warns Mr Town. Landlords must be extremely specific when calculating an inventory, rather than merely citing the type of object and its current condition, he claims, noting that the changes have "caused a lot of headaches for landlords".

So all in all, there's no doubt that students can be something of a risk for the more cautious investors, but in some of the largest student areas of the country thousands of new recruits turn up each year looking for somewhere to hang their hat. And for the savvy investor unlikely to get caught out by these pitfalls, the revenue potential is obvious.

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