A Spotlight On The Student HMO Market (Including 4 Tips for Landlords)
With the 2021-22 academic year well and truly underway, and lettings for 2022/23 also underway, we’re going to shine a spotlight on the student HMO market this month.
Student HMOs make up the majority of HMO properties across the UK, and it’s therefore an incredibly well-established investment strategy. One of the reasons why I love investing in student accommodation is because it’s a pretty safe bet that the University Isn’t going anywhere. And every single year, they are bringing more and more students to the area who could ultimately become our tenants.
This year there’s a record number of students taking up university places. More than 210,000 18-year-old students in England alone had their university places confirmed, according to government figures. As living away from home is an enormous part of the university experience, appetite for student HMOs is set to grow.
Even though COVID-19 disrupted most face-to-face teaching from the last academic year, demand for student housing still remained resilient. Certain areas in particular were home to steady demand. This helped some HMO landlords to maintain strong rental yields.
New analysis by Goodlord is even showing that rental yields on student lets are increasing steadily across England. With the hopes that the upcoming university term will provide a return to more normality, there is expected to be further growth in the student lettings market.
Tips for Landlords Investing in Student HMOs
When investing in student HMOs, it’s imperative that you do it the right way to future proof your properties. With the sector’s growing popularity and historically high performance, the barrier to entering the student HMO market is generally higher than other markets.
The rise of purpose-built student accommodation (PBSA) has further pushed up standards and expectations. And the pace of movement in the student lettings market is so fast that you will need to keep on top of that long term. Here are four tips for HMO landlords investing or holding property in the student market.
Strive for High Standards
Standards and expectations are very high in the competitive market of student accommodation. Because the standards are sky high in the PBSA sector, this has increased expectations from students as well. And as a landlord you need to be aware of this. Make sure your product is on par with their expectations – or strive to exceed them.
Make Your Property Stand Out
As competition is increasing quickly with student rental properties, this will force some of the HMO landlords with old, tired and poorly located properties out of the market. But don’t let that discourage you as it creates an opportunity for you!
Work on making your property stick out above the rest. Well-designed, high spec HMOs can make your property stand out. With my student HMO properties, I want prospective tenants to see photos of the property online and be sold before they even step foot into the property.
Focus on Providing Top-Notch Property Management
Good management is key to future proofing any HMO property portfolio. But this is particularly important in the student HMO sector.
As tenants of a student HMO are a cohesive household, this does make the properties easier to manage. However, you still need to make sure you’re responsive to tenants’ queries and take care of repairs and maintenance in a timely manner. Providing a superior property management service allows you to set yourself above the rest and to ensure your tenants enjoy living in your property.
Put processes and systems in place to effectively manage your HMO properties. If you’re outsourcing this, hire a property manager with the same objectives and values as you, who will make sure your tenants are happy.
Provide Value for Money
Student HMOs can be incredibly good value for students, especially when compared to PBSA. HMO properties can still provide incredible quality though. However, as many students are on slim budgets, it’s important to provide good value in order to be able to compete in the student HMO market.
Student HMOs are by far my preferred method of property investment. The student HMO market comes with some exceptional benefits as an investor. If you are struggling to let your HMO this season or are concerned about what is required to upkeep a student HMO in 2022, don’t hesitate to contact us.