Targeting students can produce good returns for canny property investors, just make sure you do your homework before the start of term.
Generally speaking, the amount of purpose-built student accommodation has not kept pace with the growing number of university places. So that means students need to use private landlords, and in some areas stock is in short supply.
When considering an investment in student accommodation, you need to realise that higher education has changed dramatically over the past 20 years. These days your average undergraduate simply won’t tolerate a camp bed in the corner of a lounge – so standards have been forced to meet expectations.
To get the best yields, you need a large house with plenty of bedrooms which you can turn into a House of Multiple Occupation (HMO). Clean and basic will do, but you must adhere to HMO rules which include strict fire regulations. Do your sums and make sure your property is among the cheapest.
Downsides? There are plenty, including: higher maintenance bills, overdue rent, void periods in the summer holidays and lower capital growth. To be on the safe side, only allow students recommended by the university and insist on references and guarantors. You can also give the students some control by making them responsible for maintaining the property and finding replacements if someone moves out.
Overall, student accommodation can be seen by some as high risk, but get it right and you can enjoy healthy returns for years to come.
If you are thinking of investing in a buy-to-let property, call Knight Property Management today on 01992 308181.