For the best yields, buy the best student property investment
Property investment in student accommodation has many benefits. Net yields are often higher than traditional buy-to-let gross yields. It’s a recession-proof sector of the UK property market. Properties benefit from professional property management. The list goes on.
However, as with all property investment opportunities, performance depends upon your property investment strategy, buying in the best areas, and buying the best property. The best student accommodation opportunities share many elements with other property investment, though there are a few differences.
Here, you’ll learn how to spot the best student accommodation opportunities as a Beginner Investor.
Student accommodation fundamentals for property investment
The key to analysing opportunities for this type of investment is to think about what students want. For the majority, this will be their first foray into living on their own. While you might benefit from the advantage of having your tenants’ parents as rent guarantors, students usually want to be living together. They want to have some of the comforts of being at home, while living close to the university, shops and entertainment. Here are six factors you must analyse when considering student accommodation for investment:
1. Location
The property must be in a location that is well-connected. Students are only just leaving their teenage years behind. They want to live close to all the things that are important to them, without having to rush around too much! So, you need to buy in the right area, and on the right street.
Students generally have three things on their mind: their education, their downtime, and being able to pick up some part-time work for a little extra cash. Look for student accommodation that is within walking distance of:
- The University
- Bars, restaurants, and nightlife
- Work opportunities
2. Transport
There aren’t many students who have their own cars. Instead, they rely on public transport. You’ll be looking for property that benefits from proximity to bus and train stations – a regular bus service to the university will be popular when it’s raining.
3. For ‘major employers’, substitute ‘universities’
When searching for the best places to invest in property UK, you’ll want to ensure that there are enough employment opportunities in the area to sustain demand. Where one major employer or industry dominates the local economy, the risk of economic collapse is increased (for example, think about how whole towns were decimated when the UK coal industry closed).
So, ensure that you invest in an area that has a really strong university. Preferably two. Sheffield, for example, benefits from two universities, both of which are thriving: The University of Sheffield and Sheffield Hallam University.
4. Modern, custom-built property
Students like modern. They like clean, fresh lines. They don’t need (or want) gardens that need tending to and destroy their relaxation time. They don’t want to live in accommodation that requires a lot of maintenance (and you don’t need the hassle, either). The best student accommodation offers:
- Modern kitchen and bathrooms, with robust white goods
- In shared accommodation, ensuite bathrooms are better than shared facilities
- Easily cleaned flooring
- Broadband access
- Shared ‘block’ facilities, such as outside space and common rooms
5. Go with an experienced developer
Developers who have experience in building student accommodation will build the best property for this type of investment.
Examine the track record of the developer, and look at what they have previously delivered. Student accommodation is HMO property investment. It is more highly regulated than traditional buy-to-let investment. A developer who has built in this sector before is likely to develop property which is fit-for-purpose and conforms to all the HMO regulations.
6. Who is the property manager?
You’ll want to know that your property is managed by an experienced management group. It will need to provide all the support services required by students and investors. These might include:
- Reception and administrative duties
- Checking in and out of all students at the beginning and end of tenancies
- Inventory management
- Inspections of apartments and bedrooms each term
- Regular cleaning of common areas, stairwell, reception, management suite, laundrette and common room
- Security and emergency management
- Planned and reactive maintenance with input from specialist subcontractors
- Marketing, control of void periods, and resolving rental arrears if necessary
Our research team has identified some incredible property investment opportunities in the student accommodation space. To find out more, and how easy it is to invest for market-beating net yields, contact one of our team today on +44 (0)207 923 6100.
Live with Passion
Brett Alegre-Wood
