To be a successful student landlord, you must be able to offer an appealing product. This largely revolves around choosing the right property to let. There are certain property characteristics which make them appropriate buy to let investments within the student sector, such as size and size. Making the right decision when buying a property can significantly improve your chances of financial success.
Where Students Rent
There are usually areas of university cities where there are high concentrations of students living. They tend to be outside of the city centre, where property prices are more affordable, and in residential areas made up of older terraced houses. Students are drawn to these areas by the affordable rent, to be nearer friends, and the proximity to amenities such as bars and shops which have learned to cater to students.
Also, it is best to choose a property which is near the university campus. The National Student Accommodation Survey 2019, found that on average students lived 20 minutes from their university. This usually places student house just outside of the city centre, but within walking distance of campus, nightlife and other facilities located in the city centre. Downing Students found that 86% of students stated that location was a very important factor when choosing their accommodation.
Size
Most commonly in the UK, student properties are shared by 4 students. Choosing a property with 4 bedrooms will maximise potential tenants and returns. Often a 3 bedroom property can be easily have an extra bedroom added through conversion of an extra reception room or loft space. Older properties tend to have more space to do this, but often require more maintenance. Having multiple bathrooms will also be attractive to student tenants.
Timescales
The student housing sector is very cyclical, there is a clear structure to the annual market. To get the best return on investment, being aware of this when buying is important. The student letting process begins very early with 57% of students looking for their next accommodations in January or before. When buying a property, particularly one where renovation is needed, it is best to try and get the property, or part of the property, completed for when viewings occur. This will show prospective tenants the expected finish and will increase their overall confidence in choosing to lease the accommodation.
Furthermore, the university term usually commences in September, with students generally moving in around that time. If your property renovations are not completed by this time, it may result in a long void period – possibly up to 12 months – as it will get increasingly difficult to find a student tenant as the year goes on. During this time you will be responsible for any costs associated with the property such as insurance, tax, utilities and possible mortgage payments.
Maintenance
Low maintenance properties are best for buy to let investments as it limits the amount of time and money spent on the property. This also reduces interruptions to tenants and makes their tenancy of the property more straightforward. Conducting regular maintenance checks and catching problems earlier will reduce the cost of repairs, while a garden area with paving rather than lawn is easier to maintain and will also increase the amount of the year it can be used.
Study The Market
To best inform your choice when buying a student property, carefully look at the existing housing market in the area. This will point out the popular student areas, characteristics of properties and student tenant requirements within the city. It will also inform you of expected rent rates and yields in the area.
With this information you can best choose a property and then tailor it to the needs of the potential tenants in the area. This will offer the best chance of maximising the performance of your buy to let property.
References
National Student Accommodation Survey 2019. 2019. Accessed 12th November, 2019, from https://www.savethestudent.org/accommodation/national-student-accommodation-survey-2019.html
Downing Students. 2019. Accessed 12th November, 2019, from https://www.downingstudents.com/six-top-tips-choosing-perfect-student-accommodation/
Landlord Vision. 2019. Accessed 12th November, 2019, from https://www.landlordvision.co.uk/blog/successful-student-landlord/
Buying and Selling a House. 2017. Accessed 12th November, 2019, from http://buyingandsellingahouse.co.uk/buy-let-property-choosing-managing-student-lets-landlords-responsibilities
