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The student accommodation market is driven by the growing demand from the 2.2 million student population in the UK. Although the current student housing supply can barely accommodate the influx of local and international students, private property owners have stepped up to fill the gap.
According to reports, student accommodation costs range from £155 to £259 per week. Purpose-built student accommodations cost £166 while private ensuite rooms cost £155 and studio units £228 weekly. In London, the average weekly rent is £212 (university accommodations) and £259 (private rentals).
What does this mean? Private student accommodations earn approximately £1,036 each month.
What happens to this income once the term ends? The property is left empty for 2 months.
As a multi-property investor, this feels like a waste of your investment. Instead of leaving your private student accommodation empty for 8 weeks, why not maximise its performance by turning it into a short-term rental?
You can open the property for short-term letting so guests can book it for a few nights. Maximise rental yield through the short-let rental income you can generate from summer tourists in London.
In this article, you’ll discover why this is the perfect solution to maximise investment returns. You’ll also be given 10 tips to help turn your student accommodation into a short-let.
Facts that Prove Short-lets Maximise Rental Yield
If you’re looking for the best way to maximise the earning potential of your student accommodations during the term break, you need to consider short-term letting. Among the other letting strategies, this is the one that can give the highest rental yields during the summer season. There are three reasons why this is true.
First, London always has visitors. In 2022, the city reported a 141% increase in visitors compared to the previous year. This is backed by data from London’s attractions, musical event attendance and film industry statistics. Apart from the attractions and events, the cultural and historical appeal of the city draws people from all over the world. The more people visiting the city, the greater the need for short-term accommodations.
Second, shortlets offer the highest income potential for properties. In the letting industry, it’s normal to give lower nightly rates for month-long leases as a discount for a higher occupancy rate. Short-term letting does not have this - which is why the nightly rate of short-term rentals is higher compared to long-term letting strategies.
Third, the summer season is the best and most profitable period for short-term letting. It’s the high season for rentals with visitors flocking to the city for summer events. The demand for accommodations rises and this puts pressure on the rental rates causing it to increase. The more nights are booked during the summer, the higher the rental yield.
This is why you should time your marketing efforts well. You want to keep your student accommodations busy while students are out on their term break. With short-term letting, you can easily control how many guests and bookings you’ll accept. You get full control over its availability so you can free it in time for the start of the next term.
10 Tips to Turn Student Accommodations into Short-lets
Now that you understand the benefit of turning student accommodations into shortlets, the next question is how do you make the transition? What do you need to do so you can get more bookings over the summer months?
Here are 10 tips to guide you.
Do your research
The short-term letting market is different from student accommodations. You get a variety of guest preferences. Do your research to transform your property into an appealing short let that other people would want to stay in - whether it’s a group of friends, a family or a couple.
As you research, consider the market demand, seasonal fluctuations and events that might affect the property’s occupancy rates. You should also look at short-term letting platforms you can use to market your property. This will set you up for the next steps you need to take.
Work on compliance
As a student accommodation, the property already complies with basic safety and structural regulations. However, as a short-term rental, you might have to check if there are specific regulations that you need to comply with.
In London, there’s a 90-day limit for shortlets where you can only rent the property within that time. If your property is a student accommodation for 10 months and a short-let for 2, this may not apply to you. However, you might have to list your property as a short let - depending on what the local council specifically requires in your area. Look at the necessary permits or licenses you must apply for to operate as a short-term rental.
Secure the property
Rental properties are investments you need to protect. Before you get short-term guests, secure your property and have a contingency plan for various emergencies.
Start with the insurance coverage of the property. It should include coverage for short-term letting. If you still need to, update your insurance. Check the security systems and the smart detectors to ensure they all work properly.
Prepare the property
As you look for student accommodations, find out what you need to change to make it more appealing to short-term guests. See if you need to rearrange the furniture to make it look more cosy and welcoming.
Clean and declutter the space then take high-quality photos. Include a video if you can. Make sure you capture angles and features that appeal to summer travellers and tourists.
Set up a host account
Once you have the marketing materials ready, it’s time to set up a host account. Go back to what you researched and see which short-term letting platform you can use. Create a host account there to start advertising your property for letting.
Consider using Airbnb, VRBO or Booking.com - choose the one you think will attract the guest market you want to cater to. You can create a host account on several platforms, but make sure you have a program or app that will allow you to monitor the booking schedules to avoid double bookings.
Create the property listing
When you’ve chosen the letting platforms, create your property’s profile. Come up with catchy headlines that call out to the short-term guests. Write a property description that highlights the features that make your unit unique. It could be the amenities, smart home features, city views, or nearby attractions - make it stand out to improve occupancy rates.
Upload photos and videos so potential guests can see what your property looks like. This will give them a glimpse of what it’s like to stay in your short let.
Outline house rules
Part of the property profile is a section for the house rules. Try to be as detailed about it as you can. Include the do’s and don’ts so your guests will know upfront what they can or cannot do. Provide a seamless check-in and check-out guide, including the preferred times they should arrive or depart.
Have a printed version within the property so your guests can review it. You can even provide instructions for using the equipment around the house. Try to have the instructions near the equipment (e.g. coffee maker, stove, dishwasher, washing machine, etc). This will keep confusion and mistakes from damaging your property.
Arrange for cleaning services
Since students live in accommodations for months at a time, there’s no need to hire cleaning services because the residents would take care of it themselves. With short-term letting, this isn’t possible. You’ll need to hire cleaning services to clean the property between guests.
Contact a local and trustworthy cleaning service provider who can do this for you. Look for a company that provides amenities like towels, toiletries, linens, etc.
Choose a secure communication channel
You probably have this set up for your student residents so you can use this for your short-term guests. It’s important to have a secure communication channel so guests can contact you in case of emergencies, disputes or maintenance requests.
The more responsive you are to inquiries and requests, the better the overall guest experience. This will increase the chances that you’ll get a positive review.
Market the property
Once you’ve set up all these, it’s time to market the property. Go to social media and start marketing the property to attract short-term rental guests.
This has to be done way before the summer season starts. This will ensure bookings just after the student renting your property leaves for the term break. Give your property a few days to be deep-cleaned before the first booking.
Get a Flexible Property Management Partner
Maximising the earning potential of your rental property is possible if you’re willing to adapt and use flexible letting methods. While changing strategies may be tricky because shortlets are different from student accommodations, it can be done with the right information, guidance and professional help.
The transition is easier if you partner with the right property management company - specifically one that’s an expert at flexible letting methods. Opago offers both student accommodation and short-term letting management services. We are experts at both letting strategies so we can market and transform your properties to accommodate the different needs of the market.
We use state-of-the-art technology to implement dynamic pricing strategies and monitor a property’s performance - ensuring that booking details and cleaning schedules are all handled. We also have a dedicated team to monitor guest inquiries and requests.
If you want to maximise rental yield potential, contact us. Let’s discuss how we can help you transform your student accommodations into shortlets.
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