With a high population of students in the Edinburgh area due to the six different universities situated there, landlords in this area will often find themselves renting out their properties to students rather than families or young professionals.
In this article, we’ll guide you through the pros and cons of renting to students in Edinburgh, as well as some information on how much rent students generally pay on a property in Edinburgh.
We’ll also go through some figures surrounding how profitable it is to rent out a property to students in Edinburgh, calculating a rental yield based on average rents and property prices.
Is it a good idea to rent to students?
Let’s start with the basics. Is it a good idea to rent to students?
There are a number of advantages and disadvantages to renting out a property to students; we’ve explored the pros and cons in the below sections in more detail.
Pros
Here is a list of advantages to renting to students that may encourage you to consider them as tenants for your next rental property:
- High demand – One of the biggest reasons why landlords rent out their properties to students is because there is a very high demand for student housing. With six universities in Edinburgh, there are approximately 55,000 students in the area, most of which will require housing at one point or another.
- New tenants each year – Another advantage of renting a property out to students is that you’ll have a new stream of interested tenants looking for a property each academic year. This means it’s unlikely that your property will be empty as there will always be new students on the lookout for rental properties.
- Higher Rents – You may be able to yield higher rents when letting out a property to students. This is because a property based near a university is 30% – 40% more likely to be higher in rent than one further away.
- Save money on upgrades – As students will generally only be looking for temporary accommodation, you will likely save cash on upgrades such as top-of-the-range appliances. You’ll obviously need to ensure that appliances work and that repairs are carried out in a timely manner, but with most students just looking to stay in a property for a year or so it’s unlikely they’ll be requesting big upgrades such as stainless steel appliances for example.
Cons
There are also some disadvantages to bear in mind when renting out a property to students; we’ve included these in more detail below:
- Property damage – Students are known to have the occasional party, which could result in your property being damaged one way or another. It’s unlikely that they’ll have the experience to handle small repairs themselves, and therefore a rental property let out to students may cost you more in maintenance than if renting out to a family for example.
- Noise complaints – Similarly to the above, as some students are known for their raucous house parties you may be more likely to receive the odd noise complaint than if renting out to professionals or families.
- Limited credit history – You may find that credit checks aren’t great when vetting students for your rental property. This is purely down to the fact that they won’t have much experience in renting a property and therefore may require guarantors to give you peace of mind that rent will be received in full and on time.
- High Turnover – While there should be plenty of demand for your rental property, you may experience a high turnover when renting out to students. They may only stay a year in one property, or even a semester or two. This may mean that you’re advertising your property more often than if you weren’t renting out to students, so you may wish to consider yearly contracts to ensure you’re only having to advertise once a year at most.
How much do students pay for rent in Edinburgh?
The cost of rental properties in Edinburgh varies greatly depending on the area and condition of the property, however, a five-bedroom property in the centre of Edinburgh will have an average rent of around £3,734 per month.
Between five people, this means that each student will be paying an average of £746 per month for their university accommodation.
How much does a landlord typically make from renting to students in Edinburgh?
In terms of how much a landlord generally makes from renting to students in Edinburgh, this will depend on the price of the property and the average rent that will be achieved each month.
The average price of a property in Edinburgh is £338,452. With an average rental income of £2,553 each month, this would provide a rental yield of 7.5%. This is considerably higher than the UK average of 3.63%, indicating that renting out a property in the Edinburgh area is a very good investment.
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