If you’re looking to invest in property, student housing could be a potentially lucrative market to look into, with more people than ever studying in the UK.
The latest figures put the amount of UK students at around 1.8 million, with many of those students living in rented student accommodation.
We spoke to Mighty Student Living, who said: “While there was some worry that the student property market might be hit by Brexit, more people than ever before are coming to study here in the UK, and there’s still plenty of potential for investors.”
With such potential for some pretty good rental income, here’s our quick guide to investing in student property.
Location
Choosing the right location is key when investing in student accommodation, perhaps even more so than the appearance and condition of the building itself.
Be sure to do a little research to make sure that you’re investing in an area with lots of students, but relatively little existing accommodation.
For example, many northern towns and cities have much more students than they do suitable accommodation, so there’ll be little competition.
On the other hand, many parts of London are oversaturated with student properties, where the costs are also much higher too.
Once you’ve found a suitable town or city, it’s all about choosing somewhere that’s close to both the university itself and the town centre, with plenty of amenities such as shops, restaurants, and of course, pubs!
The Property
While you might think of student properties as being pretty basic and low-budget, think again!
Student properties today are much more sophisticated than you might think, with students more than happy to spend a little extra on rent to ensure that they’re comfortable.
Bear this in mind with choosing a property to invest in and don’t worry too much that you might be pricing students out if you charge a slightly higher rent, because many (especially overseas students) will be more than happy to pay that little bit extra.
Making sure that the property is fully kitted out with a modern kitchen and bathroom doesn’t just make the property more attractive to potential tenants, but newer utilities mean that you hopefully won’t have to pay as much for maintenance further down the line.
Finance
Mortgages for students lets can be a lot harder to obtain than normal buy-to-let mortgages and not all lenders will be happy to grant you the money for a property if it’s going to be rented out to students.
However, if you’re investing in a purpose-built student accommodation development then you won’t be able to get a mortgage for this and will have either pay with cash or finance it through a loan.
Returns
While you won’t necessarily see great short-term gains, investing in student property can be highly lucrative.
As we’ve pointed out, there’s plenty of demand for student accommodation and you can expect a return of about 10% on your investment, but do bear in mind that this is a medium to long-term investment and you might have to be a little bit patient!