As the government is encouraging further education at university level and this year, it is predicted that an extra 60,000 students would attend university following their campaign. The student lettings market is worth considering for the potential of high yields. In Cardiff especially, with the top ranked university in Wales and the population of students in Cathays averaging on 30,000 tenants alone, it seems that student lettings can be a worthwhile investment.
It is widely discussed that if you have a child going to university for a minimum of 3 years, depending on the length of the course, there could be an investment right in front of you. We see several of our landlords purchase properties for their children and rent it out to them and their friends over the years, even if the area is not in their hometown. Furthermore, keeping the property after their graduation will allow the property to continue to bring in a rental income, if not at this stage the return on investment will be higher, as there will be no need for favourable rent for your children and their friends. Some landlords also ask for full rent for the 12 months, or half rent for the summer months, in order to save on any void periods when the students return home.
You need to be aware, that if you purchase a property in the student area of Cathays, you will most likely be purchasing a HMO. These are let on a per room basis and here at Keylet Sales & Lettings we can support you with licensing and ensuring everything meets the requirements. You can also benefit from obtaining a higher yield renting a property on a room by room basis.
A more recent investment for Student Lettings would be purchasing a pod, this is a less hands on option for property investors. A high end student pod are individual en suite rooms in a self-purpose built block.
Whatever investment path you choose, it can be successful and if you point a managing agent, you will have the advantage of them knowing the student lettings market specific to that area. We’ve put together seven of the most important tips when considering student lettings as an investment
- Seriously consider renting rooms as HMO individually
- Obtain guarantors from students to ensure that the rent is guaranteed
- Make sure you check out the area, where do students live?
- Furnish the property to a certain standard, making sure you have desk in each room
- Leave yourself enough cash in the bank for any maintenance and repair costs
- Expect a high tenant turnover – often yearly
- Prepare for void periods and utilise them e.g. offer short term lets, undertake any maintenance
Published: December 2, 2015BACK TO NEWS LIST