If you’re considering investing in student property but don’t know where to start, this blog post is for you. Now is the perfect time to invest as you still have enough time to prepare the property before the next set of students move in in September. If you live in a University city, a student property can be a be a great decision as there is always plenty of potential residents. According to Universities UK, there were 2.32 million students studying at universities in 2016-2017. Investing in student property has becoming increasingly popular in the past few years and it’s clear to see why.
Choosing the right city
When investing in any buy-to-let property is it very important to think about location. There are plenty of guides online that outline the best cities for investing in student property. According to County Life, “Manchester has the largest student community in the UK at about 40,000” so demand is high and in Bristol “Rental returns are robust at an average of 4.4% and capital growth looks set to remain solid.” There are so many factors to take into consideration, so make sure to do your research on which city is the best for you to invest in.
Once you have chosen a city, you also need to consider which is the best part to invest in. One positive when buying property to let to students is that from the very start you know who your target tenant is. All your potential tenants will be looking for a similar location, one that is within walking or biking distance to the university as few students have cars. They are also likely to want to be close to a train or bus station, and close to the city centre. Properties that are close to shops, bars, supermarkets and cafes are also popular with students.
Properties with three or more bedrooms, with a large communal space will appeal the most to students. A good ratio of bathrooms to students is also a positive.
As students do not typically have their own income and rely on loans and their parents, you should seek a guarantor for each student tenant, as well as ensuring they sign a tenancy agreement. This will usually be a parent or guardian and they will be responsible for the rent if the tenant fails to pay. You should also consider insuring against no payment.
Students tend to rent for a period of 12 or 24 months, which could be seen as a positive or a negative. This is because, you are almost guaranteed tenants for one or two years and are very unlikely to see shorter tenancies, however, you are also very unlikely to see longer tenancies. Other rental properties might have the same tenants for 10 years or more.
Also, remember that student properties often receive more wear and tear than others so consider the time and money you need to put into repairs. You are responsible for any repairs inside or outside. Always inspect the property before buying it, ensuring it is fit for students to live in. Search for companies who deal with roofing in Newcastle Upon Tyne, Manchester, Leeds, or the city you are investing in, if you are concerned about the exterior of the property.
You are responsible for ensuring your students do not perform any antisocial behaviour, such as throwing loud parties that disrupt neighbours. Students also expect properties to be fully furnished with beds, wardrobes, desks for each room, a vacuum cleaner, fridge and more.
Courtesy TheTopTier Digital Media