How to manage voids in student accommodation

Managing void periods, those times when a property or room remains unoccupied, is one of the greatest challenges for property managers in the student sector. For all property managers, voids can result in significant financial burdens. However, due to the cyclical nature of the student rental market, void management is even more critical for those working in the student sector. 

To help you maintain high occupancy rates, optimise rental income, and ensure your properties remain competitive in the market, we’re providing practical strategies to help you minimise and manage voids. 

Why are voids bad in the student accommodation market?

Voids can be particularly detrimental in the student accommodation market for several reasons:

1. Loss of rental income: Perhaps the most obvious challenge with voids is that when a property or room is empty, you miss out on the expected rental income. This can have a significant financial impact, particularly if your business model relies on you maintaining near 100% occupancy. 
2. Ongoing expenses: Even if a property is unoccupied, you still have to cover various costs including utilities, mortgage payments, maintenance, and other associated charges. These expenses can quickly add up, eating into your profits.
3. Disruption of the rental cycle: The student rental market operates on a specific cycle, tied to the academic year. If you don’t fill voids at the right time, you risk becoming out of sync with the booking cycle. This can lead to prolonged void periods, further exacerbating financial challenges.

How to effectively manage voids in the student accommodation market

Effective void property management requires you to be proactive and plan strategically. These six actions can help you reduce the chance of voids and maintain high occupancy rates:

1. Market your property correctly

If you want to attract tenants at the right time, effective marketing is crucial. Create a detailed property marketing strategy, which lays out the channels you will use to advertise your listings, the budget you can assign to each, and the metrics you are hoping to see. Ensure you are properly utilising online listings platforms, email marketing, and social media to reach the widest possible audiences. 

On a micro-level, you should ensure that each of your property listings is optimised. Highlight key features and unique selling points and include well-lit, well-framed images that showcase your rooms in the best light - literally. 

2. Price your property competitively

Setting the right rental price for student accommodation is critical. If you charge too much compared to market averages, you risk deterring potential tenants, but if you price too low you could limit your profitability. Conduct market research to understand competitors’ rates for similar properties in your area. This will help you set a competitive price that attracts students while maximising yields. 

3. Factor voids into your pricing

It’s important to anticipate and factor void periods into your pricing strategy. A good rule of thumb is to account for a 5% vacancy rate. By incorporating this into your total revenue target, you can adjust your pricing to cover potential losses from empty rooms or no-shows.

4. Make the most of summer opportunities

The summer months typically see a decline in occupancy as the academic year has finished and students go home. You could think about leveraging this period for short-term leases or summer hoteling, especially in locations that attract tourists or have significant summer activities. This approach can help you maintain cash flow during the off-peak season.

5. Extend your contract lengths

Although it's more typical for PBSAs to offer 48-week contracts, you could consider offering longer contracts, such as 51 or 52 weeks to boost profits. This is especially prudent in areas where summer rentals are not likely to be lucrative. This ensures a steady income stream throughout the year and reduces the risk of voids during the summer months.

6. Diversify your portfolio

Student accommodation demand varies significantly depending on location so diversifying your portfolio across different locations can help mitigate risk overall. If demand dips in one city, the income from properties in other locations can help cover the costs of any voids. 

Make void property management easier by informing strategies with StuRents

Mitigating risk and managing voids in student accommodation requires a combination of strategic pricing, effective marketing, and flexibility. Staying proactive and adaptable in your approach will help you navigate the challenges of the student accommodation market successfully.

For more student accommodation insights that could inform your strategies and help you minimise voids, download our Annual Student Accommodation Report 2024, today.