How much rent should I charge student tenants?

If you’re a property owner or landlord considering renting out to the student market, you’re on the brink of tapping into a vibrant and consistent rental demographic. You may not, however, know how much to charge these potential student tenants. How much rent is a fair amount? 

It’s a delicate balance between ensuring your investment pays off and being fair to your future tenants. Here, we take a look at key factors to consider when setting your rental price, specifically for the student market.

Tenant Fees Act 2019

Before we look at the world of letting out property to students, we should take some time to look at the Tenant Fees Act 2019, a set of guidance that aims to make the private rental process a fair one.  

As a landlord, it will be your responsibility to ensure that the students who rent from you are not taken advantage of with various fees as this will probably be their first time renting away from home. Let’s look at exactly what the act says about tenant fees. 

Say farewell to excessive fees

You will no longer be able to charge fees on things such as viewings, credit checks or admin tasks. The main fees that will still be relevant will of course be rent and charging your student tenants a deposit. Plus, there are certain default fees, like late rent payments, that are still fair game.

Deposit security

Tenancy deposits are no longer allowed to equate to more than five weeks’ rent. Also, as a landlord, you now have the responsibility to look after the deposit given to you by your student tenants. This means that you will need to ensure that the deposit is put into a government-approved scheme that will keep the money safe. 

Your student tenants will still be allowed to put down a holding deposit (that’s capped at one week’s rent) and if they decide against going through with renting your property, they will be able to get the holding deposit back. 

Making all fees as clear as day

You now have a duty to ensure that any potential student tenants are aware of all the fees they will need to pay. This way, they have a clear understanding of what they need to pay before, giving them time to make informed decisions about your property. 

The ultimate aim of the Tenant Fees Act 2019 is to ensure that there is ultimate transparency for all parties involved in the process. Your student tenants will also have a fairer chance of understanding what is expected of them and it gives them the chance to plan out their monthly expenses. 

Landlord responsibilities and regulations

So, as you can imagine, your responsibilities as a landlord remain the same when it comes to renting out your property to students. And in fact, there are additional regulations and policies in conjunction with the Tenant Fees Act 2019 that you should be familiar with and keep up to date with as a landlord, including: 

• The Landlord and Tenant Act 1985 
• Landlord’s guide to right-to-rent checks guidance 
• The tenancy deposit protection legislation 
• Landlord licencing policies 

Now, let’s get into what you really came here for!

How much rent should you charge student tenants? 

Now that you have a better understanding of the Tenant Fees Act 2019, we can take a look at the different factors to take into consideration when figuring out the perfect amount to charge your student tenants in rent. 

Understand the local market

Firstly, begin with the basics. The local rental market sets the stage for what you can realistically charge. 

Prices vary widely depending on location and property near a prestigious university in a major city might fetch a higher rent than a similar property near a community college in a rural area. 

Scour through rental listings, local forums, and even university housing boards to get a grasp on the going rates for properties similar to the one you want to rent out. 

Location, location, location

For students, the proximity to campus, availability of public transport, and access to amenities like cafes, libraries, and the city or town’s nightlife can significantly influence their housing choices. 

Properties that offer these conveniences nearby can generally command higher rent. However, it’s essential to stay realistic. A price too high might push students towards more affordable options and away from your property. 

Factor in utilities and amenities

Deciding whether to include utilities in the rent is an important decision. Inclusive rent can be appealing to students as it simplifies their budgeting process, but it could also pose a risk of overuse. If you choose to include utilities in your rent, ensure your pricing reflects this added value. 

Also, if your property includes amenities like laundry facilities, internet access, and common areas, this can justify a higher rent price. Weigh these costs carefully against your expected returns, however. 

Flexibility can be your friend

Students’ needs differ from your more traditional tenants. They might seek shorter lease terms, typically aligning with the academic year. 

While this might seem like a drawback due to a higher potential of vacancy periods, it also allows for regular rent adjustments to align with market changes. Also, consider the demand during these peak renting seasons; you may be able to command a higher rent due to increased demand during term times at universities or colleges. 

Legal considerations and fair pricing

Ensure your rent pricing adheres to any local regulations regarding rental properties, including caps on annual rent increases if applicable. We spoke about the Tenant Fees Act 2019, and recommend that you familiarise yourself with it as you go on to renting to student tenants. 

Consider the ethical aspect of renting out to students. As we mentioned earlier, this will probably be their first renting experience, and you have the opportunity to give them the best experience possible as a fair and hospitable landlord. 

Also, a fair, competitive rent will not only attract more potential student tenants but also foster a positive landlord-tenant relationship, which is invaluable for long-term success.

Listen to feedback

If you’re new to renting to students or if you’ve made adjustments to your pricing strategy, pay attention to the feedback from prospective student tenants. If there is a high demand and very few complaints about the price of your property, this can indicate your rent is set at the perfect price. 

Setting the right rent for student tenants doesn’t have a one-size-fits-all answer. It requires a balanced approach, considering market dynamics, the unique value your property offers, and the specifics of the student demographic. 

By being informed, flexible, and fair, you can create a win-win situation: a rental property that’s both profitable for you and affordable for your tenants. Remember, in the student rental market, the right price is about covering costs, building a community, and fostering positive living experiences.

If you are looking for the best student landlord insurance, make sure to get in touch with our friendly team of experts at CIA Landlords on 01788 818 670.