Buying Student Accommodation
Buying student accommodation can be an attractive solution for many. They may be solving their student children’s housing needs through this investment or looking for another income stream.
Should I consider buying student accommodation for my own children?
If you are simply buying student accommodation because your children need somewhere to live for the duration of their university course, we would strongly guard against an investment of this sort.
You will need to 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 buying student accommodation as an investment, then combining it with providing your child with a home for the duration of their university stay makes sense. However, it’s important to remember that once your child has left the property, its care and administration are likely to become more burdensome.
Things to consider when buying student accommodation
If you’re considering buying student accommodation, there are several things to consider before you begin your search:
- Size: How many students do you want to accommodate? Budget obviously plays a major part, but also consider HMO (houses with multiple occupancy) regulations and the implications of buying a property that falls into this category.
- Location: You will get more interest and can charge a higher price for properties which are located closer to the university buildings. The further out you go, the cheaper students will expect the rent to be. Also consider links to public transport as most students don’t take their car to university.
- Robustness and décor: 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. When it comes to décor, it’s best to keep this to a minimum as things may get damaged or not look after. Plain walls in bedrooms are a good idea.
- Room sizes: 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.
- Finding occupants: 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.
- Empty periods: if you are renting solely to students, it’s important to remember that there will be periods of time when the property will be empty. Think about how you will handle this and what security you will invest in.
You may still want to invest in student accommodation, but you could consider the following:
- Are undergraduate 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?
Where should I buy student accommodation?
If you are considering buying 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 being built but consider your market segment carefully. Clean, well-maintained, more communal older properties will still have an appeal to a certain demographic.
How can Stacks help?
If you would like help and advice when it comes to buying student accommodation, then contact us today. Our regional directors have inside information on the property market in their area and will know the best places for investing. They can also help you select the house that best suits your target market. Get in touch here.
For more advice on investing in student accommodation, you may find this article on Your Money useful.
