The Benefits of Student Property Investment

Investing in student property is increasingly popular at the moment, and it is not difficult to see why. It requires a low level of involvement from the investor and brings a whole host of benefits that are proving hard to ignore for those who want to put their money into some form of property.

When investing in student property, you can choose to buy an existing property and offer it out to students or purchase an apartment within purpose built blocks of student accommodation which are usually located close to universities. In this article, Pure Investor looks into why student property is seeming to be such a good investment and what the benefits are.

High Demand

There are more young people than ever before heading to university, and they all need somewhere to live. Many cities which have more than one university are finding that they are being flooded with students, and yet there is a chronic shortage of places that they can call home. This lack of supply puts investors in a strong position, as it not only allows for healthy rental yields, but also means there will never be a shortage of tenants and the property will not be left standing empty.

Steady Income Stream

Renting to students provides landlords with a steady income stream. Not only do their parents often act as guarantors, but they are also keen to sign up for another year of tenancy well in advance to ensure that they still have somewhere to live.

Appreciation Potential

The property markets have shown that the only way is up in recent years, and whilst there is always the risk of this turning around, student properties tend to hold their value because of the huge levels of demand for them. As an investor, you can not only enjoy the benefits of a regular rental yield, but there is also the potential for capital appreciation as well.

Tax Benefits

Investing in student property has slightly different rules attached to it than any other type of property, and so there may be the opportunity for you to benefit from certain tax deductions and mortgage interest reductions. As most student property tends to be in the lower end of the price bracket, it is often exempt from Stamp Duty

Lower Maintenance

We all know that students have a reputation for not looking after properties that they live in, and this can put some investors off as it could mean a lot of added hard work and expense. However, this is not necessarily the case.

For many, their parents are paying the rent or at least acting as guarantors, and the students all know that it is mum and dad who will be left to foot the bill for any damage that they cause, which tends to make them a little more careful. There is also less wear and tear than you might find in a traditional family product as there are no small children running around or couples wanting to make their own home improvements.

If you have bought purpose-built student accommodation, then you will often find that this is fully managed for you and that there is staff and security on site to deal with any issues as soon as they arise. Overall, this can make student property a lower maintenance option that you might at first have imagined.

Affordable property

Often, student property is less than £100,000, making it an affordable way to dip your toe into the water of property investment, and also allows you to build up a portfolio of properties without needing huge amounts of cash behind you.

Flexibility

For many investors, the appeal of student property is the flexibility that it offers. You are not tied into long lease terms, as many students will only be in the city for three years and may choose to move to different properties while they are there. This gives you the option to offer terms which cover multiple years or stick to short term lets that expire after 9 or 12 months.

Professional Management

Student property has the ability to be a hands-off investment. It is now possible to hire specialist property management companies who can deal with the day-to-day responsibilities of the rental, including repairs and dealing with any concerns. Most purpose-built student property will already have this as an option when you buy.

This does come at a price, but it allows you to invest in property anywhere in the country without having to worry about being nearby to deal with problems.

Potential For Multiple Rentals

When investing in a property, you are usually looking for an individual, couple or family to take on the lease, but in student property you have the potential to offer leases to a number of different students. Depending on your property, you could rent out each bedroom, giving you the opportunity to rent to three, four or even five students at once.

Whilst the rental yield from each individual might be quite small, collectively it can often add up to more than you would receive if you rented the property out as a single dwelling.

Giving Something Back

Whilst most investors are purely looking for the profits that they can make, it should not be forgotten that you are also contributing something good for society. For most students, it is there first time away from home, and you are able to offer them somewhere safe and comfortable live in an affordable way whilst they pursue their education and their dreams.

Student property has a huge number of benefits, and this has been drawing more and more investors towards it. It has advantages in both the short and long term, giving it a very strong appeal for those who want to see healthy returns on their money. There is still a great deal of flexibility both in the type of property that you buy and the way in which you choose to manage it, so it can suit a wide variety of property investors.