Optimising Student Rentals
With the Barbados Government encouraging educational tourism and the increase in the number of international students choosing Barbados to pursue higher education, opportunities have opened up in the student rental market. There are now several tertiary institutions including off-shore medical schools, which attract students who are actively seeking accommodation. Over the last year, we have recorded an increase in rental transactions to students throughout the island and we expect this trend to continue.
From a landlord’s perspective, renting to students may be unchartered territory but here are four key insights on how landlords can capitalise on these rentals.
1. Duration of the rental agreement
Outside of Barbados, students have the option of renting a property per semester. The rental culture in Barbados currently is either short-term (several days to weeks) or long-term (6-12 months). While some students may seek rentals for the academic year, the landlord stands to benefit from offering rentals on a semester basis. The rental culture may begin to change to facilitate students more, as refusing four-month rentals can place a landlord in a vulnerable position of having a property sit vacant whilst searching for a long-term tenant.
As a vacancy can never be recovered, we recommend that one way to encourage occupancy is to reach out to the schools within close proximity and share property information and get it listed with an agency. Ensure that the listing optimises ondescription by using terms such as ‘students’, ‘Barbados’, and the name of the university. Search Engine Optimisation (SEO) will pull these listings easier for prospective students who are searching online for accommodation.
Students prefer to pay a flat rate per month that includes utilities and are not likely to change utilities into their names as it is costly and time consuming. Changing electricity into a tenant’s name requires a US$250 refundable deposit and internet /cable /phone packages require a US$100 refundable deposit. With the landlord maintaining the utilities and setting a flat rate for tenants, he ensures that the bills are paid and eliminates issues of disconnection and outstanding balances. We would suggest that the rental agreement includes a cap on electricity and water and states clearly that any excess of set caps is payable by the tenant.
3. Security Deposit & Inventory
A security deposit is in addition to the advance payment on rent. The security deposit serves to protect the landlord if the tenant breaks or violates the terms of the lease. It may be used to cover damage to the property, cleaning and paying off outstanding utilities charges and discrepancies with the inventory. It is pertinent to take an inventory prior to the tenant moving in and take pictures of the state of appliances, furniture etc. This inventory must be signed off by both the landlord and the tenant and rechecked at the end of tenancy. There should be allowance for a few missing items based on breakage and wear and tear. If discrepancies arise at the end of the tenancy, a landlord either requests that the tenant replaces the items or gives the tenant the option to forfeit a portion of the security deposit to replace said items. We also would suggest setting up periodic walk-throughs with the tenant to ensure the property is being well maintained. This assists in a smooth handover at the end of tenancy as students may relocate after their final semester.
Students are generally coming to Barbados with their suitcases, laptops and any electronics they require, hence the rental will need to be fully furnished including appliances. Based on our rentals to students, they also require a desk, chair and lamp in each bedroom, cutlery, crockery and linens. Air-conditioned bedrooms are preferred and we would suggest installing the more energy and cost efficient inverter ACs. Appliances should include washing machine (dryer is optional), refrigerator, stove and oven, microwave and TV. Additional appliances are at the landlord’s discretion but will add value. Keep the colours neutral and purchase pieces that can be cleaned easily. With higher turn-over rentals smooth finishes on walls are easier to clean and repaint at the end of tenancy.
The increase in the number of students heading into higher education has opened these opportunities for landlords, and this trend is set to continue in line with the growth in educational tourism in Barbados. As always, we will be tracking these numbers and delivering the market insights as they unfold.