Having purchased a student investment property, you now need to maximise your returns by following these simple steps...
Student properties are rented totally different to your average residential investment. Too often have we had student landlords come to us, having missed the boat completely, and lucked out on finding students for their property before Uni starts in February each year. If this happens, unfortunately, it is very unlikely you will secure students at all until the following year.
How does the student timeline work?
May – we kick into gear by checking with our owners whether they wish to relet their property for the following year. We then ask our current tenants if they’d like to renew for another 12 months.
August – student accommodation is advertised through various channels – most students are aware this is when they need to secure their flat (if they want a good one) for the following year.
We run a series of open homes and are inundated with up to 100 students at each one. We slowly filter a few groups through at a time, with several property managers onsite available to answer queries. Tenants then complete the application process (usually listing second and third choices), references and ID are checked, and tenants chosen.
Some students don’t have any previous renting history so aside from phoning character references we have to base a lot of our choice on gut feel. We rarely find flats abused or rents missed so we are well-guided by our experience and intuition.
Students sign their tenancy agreements for 12 months from November, paying their first weeks rent which also doubles as a deposit. They now have a secured flat for the following year.
November – as the academic year ends, students typically move out. Over a few weeks we conduct many final inspections, take care of cleaning, maintenance and paperwork as tenancies come to an end. Most tenants leave the properties in good condition as they need their bond for the next place.
The next tenancy starts a week after the last ended. Once again, we have an influx of students coming to pay their four weeks bond and collect their keys to move in.
What type of tenancy agreement is preferred?
We have always opted for a single tenancy agreement per property, where all tenants sign the same agreement, holding them all jointly and severally liable. This way if one tenant misses rent then not only are they individually liable to pay, the other tenants are also liable. The same goes for any damages. We ask that one tenant becomes the "head tenant", being the first person we would contact regarding the tenancy, any inspections, missed rent and any other queries that may pop up. Managing the tenancy from our end then becomes a lot easier rather than having to deal with multiple tenants.
Tenancies are for 12 months fixed and if they decided to renew after this, it is for another 12 months fixed. We never opt for any shorter.
Are properties furnished or unfurnished?
All of the properties we manage are unfurnished. Students tend to have all their own furniture these days, it is much more affordable now than it used to be. Second hand appliances are also easily accessible through Trademe. For landlords, the cost to repair or service appliances has sky rocketed and often outweighs the cost of replacement.
What about a change of tenants?
Often there can be a falling out when living in a large group of people or perhaps one tenant decides Uni isn’t for them and they want to leave the flat. This can be a tricky situation; however, we have a fine-tuned process well outlined on a checklist form for students to follow and find a suitable replacement for themselves, ensuring there is no cost to the landlord or other tenants.
Some tips and tricks for student flats
Ground maintenance – students are averse to maintaining grounds, so we are firm believers in employing a contractor to take care of it. Not only does it keep the property neat and tidy, this person can also alert us to any untoward behaviour.
Flatting advice – when we sign students onto tenancy agreements, we often run over a few simple ideas to make flatting easier and get them started on their flatting journey.
Mentoring – every now and then things can take a turn for the worst and we are always willing to attend a flat meeting to help sort out arrears, a falling out amongst flatmates or other problems that arise.
The future of student housing
Christchurch has become a very cool place to live. The city has had an explosion of fun new bars, pubs and restaurants and with great cycle lanes and major improvements to the university campus. With this big influx of young people, they all need somewhere to live!
We are definitely seeing an increase in students looking for rentals this year as enrolments are up significantly for 2022 at UC. People, especially college-aged students, are inherently social, and so much of university life revolves around physically being present at uni. In a post-COVID era, students will be eager to reclaim their independence from Mum and Dad and will be ready for the flatting experience.
If you want to know more about what to look for when purchasing student accommodation click here or for more info about how student flats work, please give us a call - (03) 351 7643.
An active investor with her husband Hamish, Claire loves to inspire & inform others, all whilst juggling three little boys and living her mantra to eat well and travel lots.