The UK, and Edinburgh in particular, boasts some of the oldest and most prestigious universities across the world, attracting a huge amount of both British and international students, making it an ideal place for landlords looking to invest in residential property.
Despite the increase in tuition fees, student enrolment remains high and the private student let market tends to be resilient even at times of recession. Recent statistics show that while the UK student population is more than 2 million, there are only half a million available student beds. This gives landlords a major opportunity to house the students looking to rent.
The plus side of renting to students include:
- Low expectations for furnishings and decor
- Parents will often act as guarantor for the students leases
- There are a lot of students in Edinburgh and an excess demand for student housing
- Potential profit yields can be high
However, landlords looking to focus on this market need to understand the rules, risks, and unique challenges that present here:
- Maintenance bills can be high as students are not always known for ‘looking after’ their flat, and damages to décor and furnishings are common
- There may be stretches of time that your property is empty as students may look for leases that fit in with the academic year
- Increase in purpose built student accommodation can reduce the demand for private lettings
- If your students are particularly noisy or disruptive to neighbours, you could be penalised as a landlord by your local council
If you are considering letting to students, the key legal area you need to understand is the requirement to comply with the House in Multiple Occupation (HMO) regulations. A house in multiple occupation is a property rented out by at least 3 (unrelated) people who share the bathroom / toilet and kitchen.
If you are a landlord of a HMO, you must:
- Install smoke detectors
- Carry out annual gas safety checks
- Check electrics every five years
- Ensure the property is not overcrowded
- Provide adequate cooking and washing facilities
- Make sure communal areas and shared facilities are clean and in good repair
- Make sure there are enough rubbish bins/bags
Letting to students can prove to be lucrative, however make sure you are prepared and follow the legal requirements before entering into this market.