This week we’ll discuss the advantages and disadvantages of both student and young professional lets. Many Landlords we come across often ask us which is best. As usual, let’s start with definitions.
What are Student?
Most of us know what students are. Students enrol on a course at a university or college for a certain period of time – generally 3 years. Students are typically aged between 16-22.
What are Young Professionals?
The term “young professionals” can be used to describe someone starting their first job after finishing university or someone in their thirties who is in a relatively early stage of their career. Typically young professionals range from 21-35. We include postgraduate and PHD students here.
Advantages of Students
Most student lets have fixed term tenancies. This allows Landlords to plan and know exactly when their properties will be occupied. Therefore, monthly income and yields can be calculated with an extra degree of certainty. Furthermore, this means that the property will only have to be remarketed once a year. Lemon’s tip – give your current tenants an incentive to recommend their fellow student friends. This is both easier and cheaper than completely remarketing the property.
Students are typically more laid-back than working professionals. This means they’re more likely to live with certain issues. Of course, if these issues pose a serious threat, then they must be dealt with. Though minor issues including a squeaky hinge, missing skirting board or a wonky toilet seat can be lived with. As a result, you will spend less time reacting to maintenance requests. These minor issues can be addresses during the turnover period.
Most students are not in employment and therefore do not receive an income. This means that a guarantor may be requested if the student can’t afford to pay rent. Some Landlords prefer to add a guarantor for peace of mind. You can read more about guarantors here.
Disadvantages of Students
The check-out process is complex. As it may be their first-time renting, students may leave the property in a different state to which they checked-in. This includes damages, leaving behind possessions and rubbish. This can take several days to weeks to rectify and have the property in a good, marketable state.
As most students do not have lectures or workshops over the summer, some properties will have a void period over the Summer months. Other properties may be let on a full 12-month tenancy – though it is harder to attract students that are willing to sign up to a complete year. For those with a void in the summer period, this can be used to maintain the property, though I would argue a substantial loss in rent is experienced.
Student tenancies are harder to organise because it requires all tenants to sign the contract. The process can take some time as one student may view the property and then come back with their friends. Furthermore, as you’re dealing with various tenants, setbacks and delays can occur.
Advantages of Young Professionals
On-time and Full Rent Payment
As young professionals are employed they receive an income every month. As a result, they can afford to meet the rent payments. Lemon’s tip – For additional peace of mind, you may also request a guarantor. Especially if it’s their first-time renting.
As soon as the current tenant gives their 30 days’ notice, you can re-market the room. This gives you time to secure a new tenant without experiencing a void. The turnover process is rather simple and can even be done on the same day!
Easier to Find Tenants
There are always young professionals looking for accommodation. Of course, there are peaks and troughs, though throughout the year there is always a demand. Whereas, student demand is not readily available through the year.
Disadvantages of Young Professionals
Most young professional tenancies are let on a minimum term of 6 months. For some Landlords, this may not provide them with the security required. However, from my experience, most tenants stay for much longer if they enjoy living in the property and with the other tenants. The average tenancy in my Burley house share is now over 21 months.
This is an interesting topic, which I like to view as an advantage, though in relation to this article we will compare this to the mix of a student house. As most young professionals do not know each other there is no guarantee that the tenants will get along. Whereas, students tend to get their friends together and then find a property. However, I am passionate about finding the right tenant fit.
Accountability of Communal Areas
Most young professional house shares have individual ASTs between a tenant and their room. As a result, sometimes there is a lack of accountability for the communal areas. For example, the kitchen or bathroom may not be looked after and cleaned. Lemon’s tip – you may want to consider having a fortnightly cleaner and factor this into the rent. Most young professionals will be happy to pay for this service and it also ensures your property is kept in a good state.
There’s no right or wrong answer. It depends on your property and your preference. Personally, I prefer young professional house shares and regularly advise our Landlords on best practice. If this article has helped you in any way, please feel free to contact us and let us know. Alternatively, if you have anything to add, please get in touch!
Thank you for reading and next week we’ll discuss another exciting topic! If you have any questions or need to chat to us, please feel free to contact us. In the meantime, why not visit our blog. Or sign up to our Mailing List to receive automatic updates of new blog posts and exciting competitions.
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