{"id":6097944,"date":"2023-11-01T08:50:53","date_gmt":"2023-11-01T07:50:53","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6097944"},"modified":"2023-10-31T14:34:58","modified_gmt":"2023-10-31T13:34:58","slug":"student-lets-invest","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2023\/11\/01\/student-lets-invest\/","title":{"rendered":"Are student lets a good investment right now?"},"content":{"rendered":"

Unlocking the potential of student lets: are they a golden opportunity for buy-to-let investors? Heather Martens from Mortgage Advice Bureau<\/a> explores the pros and cons.\u00a0<\/strong><\/p>\n

The UK housing market offers a range of opportunities for prospective landlords. One particular niche, which is rife with opportunity, is the student let segment.<\/p>\n

According to Savills, there are 2.2 million full-time students in the UK1<\/sup>. This works out to about three students per bed in built-for-purpose student accommodation. This shortfall may be placing growing strain on the private rented sector<\/a>, but with this strain comes opportunity.<\/p>\n

In this article, we\u2019re going to dive into the world of student lets as an investment, discussing the potential benefits, downsides, and financial considerations landlords need to make.<\/p>\n

The benefits of student lets<\/h4>\n

Students are an interesting investment for a landlord looking for a more proactive approach to letting. Here are a few of the key benefits:<\/p>\n

1. Consistent demand<\/strong><\/p>\n

University students require accommodation every academic year, and of those 2.2 million full-time students, 1.7m are undergrads, all with a pressing need for a place to sleep2<\/sup>. With this many students moving through university each year, demand will be consistently high. This can provide stability to a landlord\u2019s rental income<\/a> and reduce the risk of long-term vacancies.<\/p>\n

2. Short-term tenancies<\/strong><\/p>\n

Student lets typically operate on 12-month contracts, aligning with the academic year. While you may have tenants that will stay in the let for their entire academic career, you will have plenty that rotate through tenancies fairly quickly. This makes it easier to regularly assess the property\u2019s performance and make any necessary adjustments.<\/p>\n

3. High rental yields<\/strong><\/p>\n

Student lets often yield higher returns compared to standard residential properties. They\u2019re usually in high demand, and multiple students will often share a property, which could increase your overall rental income.<\/p>\n

Are there any downsides to student lets?<\/h4>\n

As with most things, there are inherent downsides. It\u2019s about balancing your own appetite for these disadvantages, and finding strategies to help manage them. That being said, the potential downsides of student lets are all manageable.<\/p>\n

1. High turnover<\/strong><\/p>\n

Annual turnover can be both a blessing and a curse. While it ensures a regular rental income, it can also lead to higher management\/maintenance costs and commitments.<\/p>\n

2. Seasonal vacancies<\/strong><\/p>\n

During the summer break, student properties often sit vacant. Landlords may need to account for this in their financial planning as you may not have any income during those periods.<\/p>\n

3. Property condition<\/strong><\/p>\n

Student tenants may, unfortunately, not always treat the property with the same care as long-term tenants, which can lead to increased wear and tear. Setting aside a bit of each month\u2019s income for annual repairs and maintenance would help solve this problem.<\/p>\n

4. Limited markets<\/strong><\/p>\n

Because of their nature, student lets are often restricted to university towns and cities<\/a>. This limits the pool of potential tenants and property locations, but once you find a property that works for you, it could be a great long-term investment.<\/p>\n

Financial considerations<\/h4>\n

When looking to get a mortgage for a student let investment, you will need to go on a buy-to-let mortgage<\/a> product. Working with a specialist adviser could help you secure a mortgage with more favourable terms, and there are a plethora of specialist lenders on the market.<\/p>\n