For at least the last decade the student property market ha been a hot area for property investors. There are many opportunities in todays investment market for investors interested in this area of the property market.
Even with the extra 3% stamp duty to pay and the ever increasing restricted tax allowances it is likely that student property will increase its attraction for property investors due to the more lucrative yields on offer.
With property investing becoming harder since the government began to squeeze the market, it is still possible to find investments in the student sector that conclude with a positive outcome due to the higher rents on offer.
It is often very cheap for a student to borrow via the student loan system in order to finance their living costs which in turn means they are able to afford better quality accommodation.
The trend is that students are demanding a higher standard of accommodation why is why we have seen a surge in luxury developments recent years.
Here are four reasons why you should be investing in student property:
- Student properties are often located in areas that cheap to purchase, even in inner city centres.
- If you are in the right area with the right property, you are almost guaranteed to rent it every year without fail.
- Students will pay a lot more than other tenants and in most cases the property can be rented on a room by room basis resulting in at least 20% extra for a well run shared house.
- If you were to sell the property as a going concern in future years, it is likely you will see good price appreciation.
Here are four reasons against investing in student property:
- With a single family let you are likely to see less wear and tear than you might with several students.
- Requires a diligent management system to be in place.
- You may have to seek licenses especially if you are considering a multiple tenancy agreement scenario.
- Tenants may pay a lower rent if not no rent during the months of July and August when they are not at University. Occupancy will be from September to June.
As with all other types of property investing, location is everything when it comes to student property investments. If you get the right location you will find that with a university that is always fully subscribed, your property will always be in high demand.
In some cities of the UK, students are driven towards the city centre where they will find the university, nightlife and lots of other facilities in close proximity. Whereas before students would have typically gone for housing on the fringes of the city.
Another point to consider is that students expect the very best, large study areas with ample bathroom accommodation. Excellent WIFI and even security are often top of the list when it comes to selecting accommodation. Also the type of student will determine the rental yields you are able to achieve, for example Postgraduate students or even foreign students tend to pay more for accommodation that suits their needs.
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Daniel Peacock