Young adults move out of the parental home for a variety of reasons. Often these are to do with study or work. For example, students may want to be near their university. Apprentices may want to be nearer their work. Young adults can be an interesting demographic for landlords. Here are some tips on entering that market.
Choose the specific demographics you are interested in
At a high level, young adults tend to be categorised as either students or workers. You could, however, potentially niche down further than this. In fact, it might be a good idea to do so if you’re thinking about buying property in an area where there’s a lot of competition.
For example, some young adults are single, while others are in couples. Both need accommodation. They may prefer to be on their own or they may prefer to share with friends. They may be open to either option or to sharing an HMO with other people.
Some young adults will have service dogs and/or need accessible accommodation. Some will be working and studying. Of these, some will be working and studying from home and others will be going on-site. Others will be doing a combination of both.
Each group may have broadly similar needs and wants but there will be differences between them. There are also likely to be differences between their budgets.
Pick a location that suits your demographic
If you want to focus on students, then you’ll need to have property in a student town. If you're interested in young adult workers, then you’ll need to look for locations that attract them. If you want to keep your options open, then you’ll need to look for student towns that also attract young adult workers.
Research the location carefully
Once you’ve picked a location, research it thoroughly. Find out everything you can about its property market and the young adults who live in it. In particular, try to answer the following questions.
What type of property is in demand in this area?
Who, specifically, is interested in it?
What type of income do they have?
What level of rent could they afford?
What are they looking for in a property?
You could also research local lettings agencies. At the very least, try to get an idea of the going rate in the area.
Decide what type of property interests you
If you are interested in letting to students, then you might be interested in purpose-built student accommodation. This is classed as commercial property. It, therefore, operates along different rules from standard buy to let.
If, however, you want to stick with standard, residential buy-to-let, then your main choices are houses in single occupation and houses in multiple occupation (HMOs). Both types of property are subject to the standard regulations, laws and bylaws relating to residential lettings.
Additionally, HMOs are subject to special licensing requirements. These can vary from one local authority to another. It’s therefore vital to check the rules in place in your local area. Failure to register a property correctly may result in a penalty even if your property is fully compliant with all other rules.
Assess properties with your target market in mind
Whenever you look at a property, do your best to assess it through the eyes of your target market. Start by looking at the property’s core features. Think about whether they are likely to attract or repel your target demographic. For example, if a property is very energy efficient, you can market it as having low running costs. This could be a major selling point for young adults on a tight budget.
Then think about any updates you would need or want to make to attract your target market. This would usually include furnishing it so remember to account for the cost of this. Also, remember to account for the fact that furniture will not last forever. At some point, it will need to be updated.
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