In the past couple of decades, investing in student property has been considered at the bottom of the ladder. Student property has been considered a low-return investment, and many investors have turned away from student investment.
However, in recent years, the student property market has exploded. There have been major societal shifts that have led to this development – students now expect a higher standard of living, and more students now need accommodation than ever before.
This has meant that investing in student property has become one of the largest growing forms of investment for property investors and developers in the past couple of years.
If you’re considering investing in student property, you should be aware of all of the pros and cons, and what may be expected of you in your role as a student landlord. You may need to contact certain agencies or have certain specialist knowledge, so you should ensure to keep up with this if you decide to go down the student property route. Student property investing can be highly rewarding and a good financial move if you know what you’re doing.
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Why Student Property?
As student property has evolved through time, there are plenty of exciting opportunities for further development and to receive a high return on investment.
In the modern age, students have very specific requirements when it comes to choosing a property to live in during their studies. Modern students require modern and well-equipped housing with good WiFi connection throughout the property, so they can complete their studies in complete comfort.
The old cliche of student digs being basically inhospitable won’t work with the age of modern students. This means however that you can receive a better return on your investment.
There are two main types of student accommodation that you can invest in – many student landlords buy large homes (HMOs)that are then refigured into individual rooms for residents to live in as a group.
They will share common areas such as bathrooms and kitchens, and this is the most traditional way of student living. The other type of student accommodation is purpose-built, and can look like apartment blocks. These offer the opportunity for en-suite rooms and on-site gyms, which can be very popular amongst the student population.
Thoroughly weighing up the positives and negatives of each type of student accommodation is one of the best ways you can make the best investment for you.
The Positives
HMOs
When you invest in an HMO, you have more flexibility about how you let. If you decide to get out of the student property market, there is the opportunity for you to let to professional tenants if you wish.
This is one of the best types of student accommodation to invest in if you want a reliable monthly income – depending on the time of home you buy, this could appreciate or depreciate on the property market. People don’t tend to buy HMOs for their growth in the market.
Purpose Built Accommodation
If you want to be a hands-off landlord, and have your duties managed by a company, this may be one of the better options for you. Usually, investors will get a promise of a significant return later on in time, but this could be as long as 5 years. However, you won’t have to do much upkeep or hassle.
Purpose-built student accommodation is often built with students in mind and is often located close to the university. They also offer a lot of benefits, including on-site gyms, game rooms and more. This means a lot in the modern student housing market and will be likely to receive a lot of interest.
The Negatives
HMOs
There are a lot of regulations and rules you may need to follow if you choose to invest in HMOs, and there could be a lot of unforeseen costs if you choose to direct your investment this way. This may also change depending on location, so you will need to check with local authorities before you decide to put your property on the market.
In order to do well on the market, your home will need to be refurbished and decorated to a high standard in order to do well. The days of ‘slum’ student digs are over, and you will need to make sure the HMO you invest in will be suitable for the market.
Purpose Built Accommodation
Even though investing in purpose-built accommodation is often very hassle-free, you may not see a return on investment for a long time. While HMOs offer monthly income, you may have to wait a long time to see a return on your investment in purpose-built accommodation. This may not be the best choice for you if you want to see ROI fairly quickly.
You will need to do your research when it comes to investing in purpose-built accommodation, as unfortunately, many of them look amazing on the brochure but aren’t up to standard in reality. Make sure you do as much research as possible when you’re considering investing in this form of student accommodation.
What Should You Be On The Lookout For?
If you’re considering investing in student property, there are many things you will need to be on the lookout for. Finding a property that has these things will improve your chances of doing well in the student property market:
Modern
One of the main things that students look for is a modern living space. Students don’t want to live in a property that isn’t safe or is incredibly dated – they are far more likely to opt for more modern student property.
Electrical Availability
Wifi and the ability to plug in your devices are two of the most important factors students look for when it comes to student property. Ensure that wifi can travel far around the property, and that there are plug sockets in every room so students can study effectively and efficiently.
Storage
When students first move out of their parent’s homes, they usually have too many items that they won’t end up using! However, they still need storage for all their spare fitted bed sheets, shoes, sports equipment and whatever else they end up packing! Many students report that good storage is the number one thing they look for when considering renting a student property.
Student property could have a very high return on investment and could be an incredibly lucrative financial decision – make sure you do your research today to make sure that you’re making the right choice for your desires and capabilities.
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Tom is a Digital Content Writer passionate about sustainable property & property trends. Regardless of the subject, he will always write blogs of the best calibre. Read more about Tom here.
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