According to the Royal Institute of Chartered Surveyors, the number of parents investing in property to give their children somewhere to live while they’re at university has soared in the past few years. Many concerned parents, who are worried about the debt levels their children will face after the tuition fee hike comes into play, are opting to invest in properties on a buy-to-let basis in their child’s university town. With rent rates higher than ever, especially in student accommodation, this solution can help to alleviate the financial burden that young people now face when seeking higher education. Profits can be made long after their graduation, but there are many things to consider before purchasing a buy-to-let property.
Location, Location, Location
Of the many things to consider before investing in accommodation which will specifically be rented to students, the location is one of them. The location is one of the most important factors for all students searching for a place to live while they study. All cities and towns with a large university will most likely have a ‘student’ area, with streets full of student housing, cheap bars, supermarkets, excellent transport links and close proximity to their university campus. Any housing in these areas is sure to be student-oriented and the chance of filling a room in these areas is very high. Including these selling points when you create a property listing and advertise a property online will make your offering really stand out and will help make sure your buy to let venture gets off on the best possible foot.
Basic renovation is important to get the property into good condition, but expensive furnishings are not necessary for student accommodation. Beds, wardrobes, desks and chairs should be included within each room, and there should be a communal area of a size befitting the number of tenants. Bathrooms and kitchen fixtures don’t need to be fancy, but rather functional.
Many student accommodation contracts only last for the duration of the academic year, which tends to run from September until May or June. This will mean that, for a few months per year, landlords will be without rent payments, and if taking out a loan to pay for the property, it is worth considering how the payments will be made while rent is not being taken on the house or flat. Deciding to rent a private property for the short term between semesters or considering holiday lets is a viable solution, or even offering 12-month contracts to students who need it.
Buying to let in a student area can help to maximise returns on investment; as long as there are students attending the university, there will always be prospective tenants looking to rent a room. Many student landlords choose to buy more than one property in the vicinity of the student area, simply because they know their rooms will always be in demand. Landlords can seek help from property management services to overcome the issues they find with their new occupation and use an online letting agent to keep costs down, maximising return on investment in the long term.
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