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Student buy to let property investment
Student buy to let property investment
Despite the financial problems associated with being a student, the numbers are growing and there is a rising demand for good, well priced student accommodation.
Oxford,
Oxford,
United Kingdom
(prbd.net)
08/12/2012
Despite the financial problems associated with being a student, the numbers are growing and there is a rising demand for good, well priced student accommodation. There are currently nearly 300,000 full time students in London yet only 60,000 beds provided by universities.
Parents are well aware that prices are high, and this has sparked a rush of money to this sector with people investing in bedsits. Many buy to let property investment professionals are including student flats as part of their property portfolio - as are many larger companies such as Aviva and Legal and General.
David Humphreys is a buy to let property investment expert and promotes good practice in property investment. He offers consultancy, mentoring and advice to buy to let property investors whether they are novice or professional investors looking for financial freedom through tried and tested buy to let strategies. He says:
"Investors looking at the student market should be aware that whilst on paper student lettings generate very high returns in practice those returns can be limited by high maintenance costs and other overheads.
"Also interest rates are often higher than non-student buy to let and maximum LTVs can be lower, all of which affect the cash on cash return.
"The investor needs to decide whether they're going to invest in a 'student housing project' or go DIY with their own converted HMO.
"Broadly speaking a project can be pretty well hands-off (armchair) whilst DIY is very much hands-on. If the decision is to go DIY then the standard of accommodation needs to be comparable to specialist projects. Going DIY also means personally complying with a raft of law and regulations that also apply to projects.
'Before deciding to include student accommodation in your strategy/portfolio an investor needs to check and confirm that they are able to borrow the amount involved because increasingly lenders are diffident about lending to novice investors.
'This is a niche market, albeit a large market, and investors need to be certain that their source of student tenants is definitely long-term and stable. Also it should be remembered that housing set up for students is generally unsuitable for other categories of tenants.
'Whether a project or DIY, the accommodation needs to be very 'fit for purpose' in all respects and be very competitively priced.
Notes to Editors
David Humphreys aims to make buy to let safer for investors by promoting good practice and quality housing. I offer consultancy services, investment strategies and advice on financial freedom, investment education, armchair acquisition and one-to-one mentoring. His website provides links to being a good landlord, letting quality properties, using reputable suppliers and also attempts to teach what, in my opinion, is good practice. He is also author of 'Investing in Residential Property'. To hear David Humphrey's audio about buy to let property investment, click here. Click here to find out more about David Humphreys.
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About
David Humphreys aims to make buy to let safer for investors by promoting good practice and quality housing. I offer consultancy services, investment strategies and advice on financial freedom, investment education, armchair acquisition and one-to-one mentoring
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