One of the most common conversations I am having at the moment is Landlords enquiring about the student market. Why rents are so much higher than traditional family lets? and is it easy to do? are some of the first questions asked. Coventry is quickly becoming one of the most diverse city’s in the country bringing students from a very wide background to seek good quality student properties
The pricing of a student let is enough to make any Landlord take note and ask questions, lets face it, a typical 2 up 2 down terraced house in Stoke would typically get anything between £525 to £600 PCM as a traditional let. Next door however, a similar 2 up 2 down has been adapted for students comprising of 2 double rooms upstairs and the reception room downstairs has been converted to a single room still leaving a living area and shared kitchen and bathroom, without any changes to these providing the facilities are of a good working and clean standard, can typically get anything up to £1000 PCM! Its easy to see why Landlords would be enticed to question. But apart from the clear increase in rent, at what cost can you achieve this and is it long or short term? What are the downfalls? What can go wrong?
To start with is the cost, well this depends on the starting project. Typically it can cost on average £5,000 to convert a 2 up 2 down that I mentioned earlier. The return on this looks very attractive I think you would agree. On an average 11 month tenancy agreement assuming the tenant leaves after this time then it would near enough pay for itself once costs are taken account of. There are many other things to consider when converting to a student let, Licencing as a HMO landlord for instance, increased protection in fire regulations, get in touch 02476 222441 or pop in to our office to go through all the requirements in more details.
Traditionally student lets were around 9 to 10 months in length, at Godiva Estates we are achieving 11 months contracts as standard across all of our student lets, leaving precious time between to make amendments or adaptations to the property in time for the new intake of students. We have found the alternative of a 12 month contract with the last 2 months at half price adopted by some other letting agents doesn’t always work well with handover/viewings and vacating on time.
Paying the rent is also a concern on Landlords minds. Having successfully catered for the student market for a number of years now Godiva Estates have found that with a UK based guarantor a student can pay monthly, without a UK based guarantor we ask typically for 6 months to the full term payment in advance. Godiva Estates have successfully collected all rents due across all of our student properties for our Landlords without enlisting the duties of a guarantor.
With so many purpose built student blocks and including halls of residence that are now in development across Coventry you may also be asking when will it be the end for smaller student properties and is it worthwhile investing if the boom is going to fizzle out…… I envisage that the growth of the market will continue for 2 to 3 years, after this it I think it will plateau out and be stable for as long as the demand for the best quality education that Coventry and Warwick Universities offer. So yes, it is worthwhile, especially if your student conversion is not too drastic and can be turned back round to be comfortable as a traditional family let, albeit with an extra room or two!
All the above information is my own opinion based on the experiences and conversations that have taken place and not to be taken in any form as a basis to make an informed decision when converting your property, with all the changes that happen on a regular basis in regulations surrounding letting and HMO properties you can never be sure the effects and benefits it may have that relate to your own unique situation. Feel free to call or pop in to our offices to get more information tailored to your individual needs.
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