Whether you are new to BTL, new to the student market or simply want to remain competitive, you’ve probably asked yourself this question many times before now. There is no single metric against which you should compare your property, but there are a number of factors you should consider when deciding how much rent to charge your student tenants for the next year.
Image source. Modified from original
The Market Rate
Each town and city is different; each area within a town or city is different as there will be varying desirability even between one block and the next. Before you do anything, you need to consider the market of the town and of the area where you have the accommodation for rent. The natural assumption is that you charged £900pcm last year and therefore you should charge £950 - £1000pcm this time around. The market should be your most important guide, so research your competition elsewhere and don’t forget to look at Pads For Students housing list.
Location Counts
More than the general market, location and accessibility are vital for the student. Whereas in the general market you may charge a premium for being close to major access routes or being in the nicer end of town, students care less for this than they do for ease of access to campus and other amenities. The farther away they are from campus, no matter how “posh” the area, you simply must charge less rent. It’s convenience students look for and value above all other things. Also, these quieter areas will be attractive to postgraduates and you will have competition for their custom.
© Copyright Mike Faherty and licensed for reuse under this Creative Commons Licence.
Undergraduates or Postgraduates
This is an important distinction to make as how much your charge could vary. As undergraduates will occupy a property for around nine months, there are three months of the year where you are not earning rent. Opportunities for short-term summer leases are rare (unless your property is in an area where you may harness the summer holiday market) so you should charge more. Postgraduates are likely to stay for several years without a break and you may wish to charge a lower rent to make it more enticing, but at the same time make the same amount of money spread over 12 months.
Perks
Some property owners include perks in the cost of renting and this could be a unique selling point for you – we mean things like Sky TV, broadband inclusive and so on. This things do not come at no cost to you, so they should be included in the price the students pay or you could be losing out. It is equally important not to attempt to profiteer from such perks, though astute students will see through it and realise they can still have those things and still pay less than you are attempting to charge them.