Devil is in the en-suite detailMake Text Bigger
I recently posted within a Facebook forum about a great student house we’d just completed, which we converted a three bed ex local authority property into a five bed five en-suite house.
We’ve looked at the market and of course it is obvious that people want a their own bathroom and are thus prepared to pay more finding that the high end student market can dictate room rates which exceed that of some professional lets (within Norwich).
Over the past 18/24 months we’ve started to move to all en-suites, because the returns compared to the small extra cost in the refurbishment stage give a much better yield to overall cost.
For this project the purchase price was £190,000 with refurbishment costs coming to £26,000 creating an after works valuation of £285,000. The five bed en-suite student property is now being let for £2708 pcm including bills.
We also believe this high end market will increase and show the largest percentage increase in rents vs standard house shares by offering a product which is in short supply and a premium to the rest of the market.
Renting room by room with en-suites is preferable to without for the tenants and the landlord given the extra rent that can be charged. The room rate we expect is £125 per week inc bills.
However this not only attracted the high lend of the market, but we found group who wanted the en-suite rooms, but would take the house as a whole group, sign one AST and pay one payment per month.
Now I don’t clam to be the biggest HMO/student landlord, but I have several and have experienced both room by room and groups, and would take a group any day of the week. To achieve a rent equal to that of a room by room rate AND rent to a already formed group, means we get the highest rent and with none of the issues when renting by room.
The small added expense now for an en-suite room pays massive dividends in yield and management time resource for a long term investment.
The discussion came about from an inexperienced student landlord to why we would not just ask the students to share. In many of our older houses we do, however the market which we now attract tends to be easier to manager, pay higher rents and and means we have the most desirable option.
In conclusion, if HMOs are your direction in property investment, en-suites are a no brainier!
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