A landlord’s guide to professional residential property investment versus student property investment

by Ed Firmin

Posted on Monday, August 29th, 2016 at 10:04

A landlord’s guide to professional residential property investment versus student property investment


With the latest figures showing a 2.4% increase in rental prices in Great Britain over the past 12 months, now is a great time for landlords to consider investing in a rental property. But which type of investment should you choose?


Benefits of professional residential tenants


  • As a rule, professional tenants tend to fall into a higher age bracket than student tenants. As such they have usually lived away from home and are therefore likely to take better care of your property. Of course there are always exceptions to this rule!


  • The very nature of professional tenants is that they are likely to have a full-time job or be retired, and so are less likely to fall into financial difficulties. Working tenants who are paid regularly will generally find it easier to budget for their monthly rental payments and are less likely to default.


  • If you are flexible and not in a desperate hurry recoup your outlay, you’ll have a better chance of finding a trustworthy, long-term professional tenant to pay off your investment surely but steadily over the years. The longer duration of the tenancy will also allow for a good mutual relationship between you and your tenant, who will in turn be more likely to inform you of dilapidations in the property.


  • Professional lets are not dependent on the time of year, so you are far less likely to encounter void periods over the summer months, as you might find with a student property.


Benefits of student tenants


  • If you’re looking for a relatively short-term let (e.g. one to two years) – either because you’re unsure of your future plans or because you know you will be looking to sell the property with vacant possession – then students are your best bet. You will also be able to work to more specific and predictable timeframes – for example September to June – as your tenants will be looking for a tenancy that fits around their academic year.


  • If you buy in the right area at the right time, i.e. in central Canterbury in August, there will be a good tenant base available as there will be a plethora of university students looking for accommodation before the start of the new academic year.


  • You’ll also be able to command a much higher rent from a group of students because they will usually be paying a set rental price per room. For the extra outlay of purchasing a larger property, it will yield a much higher return on investment in comparison with a professional let.


  • While insisting on student tenants having guarantors inevitably creates more paperwork prior to the tenancy, in the longer term this provides you with a contingency plan to fall back on if your tenant falls into financial difficulties. It gives you peace of mind that you have another avenue to explore before considering whether to serve notice on your tenant.


Not all tenancies are perfect all of the time, but depending on your plans for building your property portfolio, there will be a ‘right’ type of property investment for you! At Redlet we have experience in letting to both professional residential tenants and to students, so if you have any queries about either type of investment, do let us know.

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