Sunderland gets top marks for landlords renting to students, according to new research.
The city has been named as the most profitable place in England and Wales for owners renting properties in postcode areas with at least one of England and Wales’s top universities on the latest league table compiled by the Complete University Guide (CUG).
Based on figures for 2016, landlords who invest in properties in Sunderland can enjoy average rental yields of 6.5%.
The city is also the cheapest place to invest in the top 20 student towns, with the average property price standing at just £90,000.
The next best area is Manchester, with an average rental yield of 6.2%, though the North West city boasts a much bigger student population.
And while Cambridge may be ranked as the nation’s top university, Oxford offers investors a better return, with an average rental yield of 3.9%, compared to 3.6% in Cambridge.
Newcastle and Middlesbrough also feature in the national top ten for return on investment.
Christian Faes, co-founder and CEO of funding lending expert LendInvest, said: “Student towns are an excellent option for investors; there’s a steady stream of demand with each new academic year delivering prospective tenants.
“With A-level results out and the year’s clearing for university places swinging into action, where’s best for student lets will be on the minds of many landlords.
“However, landlords need to look beyond simply how big the local student population is. For instance, there are many thousands of students attending universities in London, yet when it comes to rental yields there are far more profitable areas to invest in than the capital.”
The firm has five tips for success in renting to students:
l Aim for a property which has at least three bedrooms. Students tend to rent in groups of three to five people. Having more than one bathroom will also be a big selling point;
l Location-wise, look for properties with good access to the university campus as well as basic shops and services;
l It is a good idea to ask for a guarantor for each student tenant. That way, even if the student doesn’t pay the rent, you can recover it from the guarantor.
l Consider using a joint tenancy agreement, rather than an individual agreement with each tenant. This way, if one tenant drops out or leaves, you will not miss out on rent while the room is unoccupied.
l Some universities compile directories of accredited private student accommodation in the area.
You will need to comply with certain standards in order to get onto these directories, but they are a great way of directly reaching suitable tenants.