Student Property Investment

Investing in Student Property

Student accommodation, according to many property and investment experts has bucked the recession well, and is now one of the most attractive property investments to get involved with if you are serious about making good returns.

Good quality student property provides a solid and long-term investment opportunity and is ideal for property investors who are not afraid to take the bull by the horns and get stuck-in.

In terms of financials, it is also impressive… with student property generating some of the highest yields for residential landlords of any group of tenants, and it is this that helps to create confidence in this part of the property market.

Higher rental incomes can also be achieved per property because student lets are usually made on a per-room basis rather than let as a single property.

Additionally, if you needed any more evidence that student property is the way forward, it is a fact that the shortage of university owned and purpose-built private accommodation is helping to push up private sector rental yields even further.

Basically, the numbers speak for themselves, and common sense should tell you that there is a healthy demand for good quality student accommodation as the UK’s thirst for higher education and degree qualifications increases year on year.

Student numbers are rising all the time and there is an accommodation shortfall when it comes to meeting these requirements.

Hybrid Property Investment

If like many other property investors you want to know exactly what student accommodation is all about and what kind of property you should be looking at, now is the time to start researching.

In simple terms, student property combines the best of both residential and commercial properties, and because of this is often known as a ‘hybrid’ property investment.

Students, University Towns & Cities

You will find lots of suitable properties for students in many of the major towns and cities of the UK and this is where you should focus your search if you want to secure the best investment opportunities.

Both London and Manchester, for example, are large university cities with extensive student populations and it is in such areas where you will find student property in most demand.

The outskirts of these areas should also be carefully considered if you want to source good investment opportunities, because here there are likely to be lower priced properties that will still be close enough to the university for students to be interested in renting.

If you want to be successful in your student property investment ventures, remember to source the right areas; the right sized property with plenty of rooms and scope for transformation; and a property that is close enough to the university campus, entertainment, transport and amenities.

Research your Market

Before jumping head first into the student property sector, you should be aware of some of the pitfalls that you will need to avoid along the way.

It would be a lie to say that the investment journey is stress-free and straight forward… on the contrary it is often hard work and takes experience, and a lot of your time and patience to be successful.

One of the first things you should consider before you invest is the current state of the education sector in general, focusing on the projected growth of universities and colleges, and whether this will have a bearing on your investment decisions.

An example of this wider focus is the recent announcement that university fees may be increased from their current cap of £9000 per year.

You should analyse any market research reports you can find on the growth in the education sector that have already been conducted to learn whether predictions indicate an increase or decrease in student numbers in your selected areas.

However, the majority of recent articles on the subject have produced statistics which indicate that, although student numbers may fluctuate, it is nothing too dramatic, so in this respect, student property is still a good investment opportunity.

Financing your Student Property Investment

If you are financing your investment through a bank, building society or specialist property lender you should bear in mind that they are likely to require a larger initial deposit from you than they would when buying an owner-occupied house.

The size of the deposit amount will vary between lenders, but typically it can be anything between 25 and 40 per cent of the total mortgage valuation.

Other aspects that need to be taken in to account include property insurance – as there will be lots of people in the property – maintenance cost provisions; occupancy; and a thorough understanding of the lender’s rental criteria.

Your Key to Success

A lot of what you need to consider is common sense although we would recommend that spending time researching the student property market, identifying popular locations, available properties and prices paid, student demand etc. is key to your success… and if you put the time and effort in you will reap the rewards.

Expert Student Property Investment Solutions

As leading independent property 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 an investor, property developer or builder seeking to acquire or dispose of development land, building land and plots contact our land and property investment team today to discuss how Investment Property Partners can help you.