Student property investment

Student Property Investment – Investing in Student Accommodation

If you are an active property investor reviewing the different types of investment available in the property and real estate investment arena then you may have already come across student property investment opportunities. If you haven’t then now might be a good time to take a more detailed look at what student accommodation has to offer property investors.

Every year, thousands of young people from all over the United Kingdom leave the family nest and head for university. Despite the rapidly rising cost of study, the number of youngsters going on to further education is set to continue to grow. Additionally, the number of international students coming to the UK to study is due to increase by 10% over the next decade.

Student Property Investment

For the property investor this is all good news and makes student property investment opportunities one of the most attractive types of accommodation to invest in.

Student property rentals have many advantages over the more traditional types of residential buy-to-let property.

Student accommodation typically has a high occupancy rate, it’s very easy to find new tenants and they provide an almost guaranteed source of income.

The rental levels and returns achieved on a typical student property investment are also usually higher than that of a non-student residential property, meaning that your “landlord mortgage” can more often than not be paid off a lot faster.

Many colleges and universities simply have too many students to house on campus, meaning the market for alternative student accommodation is booming.

Types of Student Accommodation

Student accommodation can be any type of property including houses, flats, private halls of residence etc. with multiple tenants in single houses being the norm.

If you own a property occupied by multiple student tenants, rents are typically charged on a per student basis, giving you a much higher rental yield per property, than a house occupied by a single tenant or family.

It is also useful remembering that the closer the property is to the college or university, the more rent you can usually charge.

Ideally, the best student property investments to buy are ones located right across the street from the university but if this is not possible, look for properties that are within walking/biking distance, have easy access to public transport and are close to the city/town centre.

Best Locations for Student Property

London is the obvious choice for property investors due to the large numbers of students it attracts, but it is also the most expensive in terms of the initial investment, making it important you pick the right area and the right property.

In the Student Property Index 2012, real estate specialists Knight Frank reported that London will remain a top student property investment opportunity due to limited availability, but it also put Brighton, Durham, Edinburgh, Kingston and Manchester at the top.

A good tip for any property investor looking at the student accommodation sector is to choose the university towns and cities that attract the most students.

Knight Frank predicts that applications to the top universities (those in the Russell Group and the 1994 Group) will remain strong, while those at the bottom of the league tables will struggle.

Another tip would be to focus on universities that offer a higher proportion of science, technology, engineering and maths courses, where government investment is expected to be concentrated.

Standards for Student Accommodation

Many students today have high expectations and are prepared to pay increased rents for good quality accommodation and a caring landlord.

A good tip is to focus on giving your tenants a clean, well maintained and fully furnished space for them to spend their university years in.

Students are a very sociable group, so a good size lounge and kitchen area would be great selling points.

Add some extra kitchen appliances that will make life a little bit easier for a busy student, such as a microwave oven (very cheap but very useful) and a dishwasher.

Think about including free internet access, just one small way of making your property stand out from the competition.

Landlords Insurance for Student Property

If you are serious about student property investment opportunities then you’ll need to consider taking landlords insurance to protect your investment.

Landlords insurance is crucial if you wish to invest in student property as it covers many types of accidental damage, including fire, flood and broken windows.

It may also cover lost rent payments if your property becomes uninhabitable due to an insured accident and will help to find your tenants alternative accommodation whilst your student property is being repaired.

What to Consider when Buying Student Property

Student property investment is no different to any other form of investment in that you should always research thoroughly before you buy.

Look in depth at the area you are thinking of investing in.

Check the number of applications each university receives annually and how well each one is performing.

Universities that recruit a lot of overseas students may provide the top student property investment locations, as they continue to boost their global standing.

Do your calculations, make sure the property you choose is within your price range and is suitable for turning into student accommodation.

Provide everything a student is looking for, generous sized, fully furnished rooms that are freshly decorated, well maintained and clean.

Remember, the location of your student property is often the key to success, the closer to the university and to all amenities, the better chance of an excellent rental income for you.

Consider using letting agents to market your property. This way you know that the students moving in have been credit checked and referenced, giving you peace of mind.

Advertise your property even when it is full. This provides you with a waiting list, so as soon as a tenant moves out, another one is waiting to move straight in and your property is never empty.

Property Investment Solutions

As a leading independent property and land investment specialists Investment Property Partners offer expert advice and support to clients across our specialist areas of expertise helping them to achieve their investment objectives.

If you are a property investor searching for student property investment opportunities, commercial property, residential buy to let or overseas property please contact us today to discuss how Investment Property Partners can help you.

Further reading…

More information about student property and student accommodation… here →

More information about universities in the UK… here →