Buying for student children or investing in student accommodation

It can be an attractive solution for many that they can solve their student children’s housing needs through investing in student accommodation wisely. 

If you are simply buying a property because your children need somewhere to live for the duration of their course, we would strongly guard against an investment of this sort. Consider your exit strategy – what will happen to the property at the end of your child’s studies? Will it be suitable for an assured shorthold tenancy? The time frames involved are unlikely to allow you to see a profit if you don’t wish to continue to run the property as an investment for some years to come. If, however, you have identified the benefits of a student property investment, then combining it with providing your child with a home for the duration of their university stay makes sense. Remember that once your child has left the property, it’s care and administration is likely to become more burdensome.

Size and location are the first major considerations. Accessibility by public transport, and safety of the area are crucial. Remember that during the holidays the property will probably be empty so security is also an important factor.

  • How many students do you want to accommodate? Budget obviously plays a major part, but also consider HMO* regulations and the implications of buying a property that falls into this category.
  • While students expect increasingly high standards of accommodation, and will certainly expect (and need) broadband and wireless connections, most student properties get a good kicking, so properties need to be robust, and factor in expenses for frequent work.
  • While students can pay differing amounts depending on room size, it helps to find a property with reasonably equal bedroom sizes and open plan living accommodation.
  • The university itself, and student bodies, can generally help in terms of finding student tenants, and matching students to accommodation. This is a good starting place for research.

Once your child has finished living there, use the opportunity to review your strategy:

  • Are under-grad students your ideal market? PHD or MBA students might be more responsible tenants ?
  • Often visiting professors or research fellows are more all-year-round tenants, and can be keen to bring their families with them, which can be challenging in the accommodation usually provided by the university – can your offering be made suitable for that type of tenant?

If you are considering investing in student accommodation as an investment strategy, you will need to research where the demand is the highest and expected to continue. Monitor the universities that are still building despite Brexit, but consider carefully your market segment. Clean, well-maintained more communal older properties will still have an appeal to a certain demographic.

*Houses with Multiple Occupancy

Stacks’ Regional Directors have in-depth knowledge of the investment and student market in their regions. Get in touch here.

For more advice on investing in student accommodation, you may find this article on Your Money useful.

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