Buy-to-let?

newbienewbison

I know this topic is covered quite a bit however I am looking to buy a house in a student area of a growing universtity that has a shortage of accomodation.

Is the buy-to-let model still viable? On the face of it the figures add up but I just need some advise on people's experience with the hidden costs/problems?

Thanks

poppysarah

You need to look at what plans the university have got for building their own accomodation.

And declining student numbers

m_13

There is legislation around Houses in Multiple Occupation (HMO) which unless you find triplets or quads all at the same university then the house will be covered by. You can find more information on HMO licensing here: http://www.communities.gov.uk/housing/rentingandletting/privaterenting/housesmultiple/

The amenities and space rules cover the amount of worktop per tenant, cupboard space etc and these can vary between the local authorities (some allow the minimum, others have a higher standard). They also set their own licensing fees. Camden, for example, charge £500 per property plus £30 per letting unit so a student house with four letting rooms will be £620 to licence.

You will need to account in your calculations for the empty period each year between students when you will be responsible for council tax and utility bills. It's also the case that students are more sophisticated than they were and are looking for a good level of accommodation - power showers and TVs in each room, for example - and the competition of university provided accommodation is typically providing this.

Where in the country are you considering buying? Are you aiming for next October intake? You'll need to be ready to market just after Easter as most students go home for the summer break with their next year accommodation sorted out. Homes under the Hammer has featured several buyers recently who have bought for the student market only to find they have missed the boat and all the students have already sorted themselves out!

Good luck

trogg

You do not need a mandatory licence* if your hmo has less than 5 students in it, but you may have to bring the accommodation up to specific levels (means of escape from fire and kitchens are two of the biggest changes)
If your property is in *Salford, Manchester, Gateshead, Middlesbrough and Sedgefield, you will need to licence it no matter what size it is.
Blackburn and Darwen, Hartlepool, Burnley, Easington and Bolton councils have also applied for selective licensing, so hmo's in these areas will all soon need licensing.


You can get loads of information from Landlordzone, or consider joining one of the landlord groups, IE the nla or rla.


goodluck

Mini_Bear

I have also looked into buying student accomodation for buy-to-let in my old university town (as i could see a distinct shortage).
The main problem i find is that students pick and view properties for the start of yr (sept/oct) in dec/jan/feb of the yr before. this is fine if you hav a tenanted house but means you have to race to get your property up to scratch around christmas and then face up2 a 9 month void after that.
as the other posters have said check the plans for the university building their own accomodation - this is a big money making scheme for the uni's and many will jump on the bandwagon by offering "fully catered" apartment blocks on campus.

mustrum_ridcully

poppysarah wrote: »

You need to look at what plans the university have got for building their own accomodation.

And declining student numbers

Plus what private companies are building as well. The privately run student flats / hall of residence is a fairly new development in the past few years (I suspect it's a few years since the OP was at university). These places offer rooms with en-suite bathrooms, internet access, some even have sky or cable TV, rent includes utility bills and security is better as well (I've heard of contents insurance even being included). I expect it's fair to say that the rent is very competitive...

One of these halls can easily accomodate upto 300 students - that's roughly equivalent to 50 student houses. One of these places opens and suddenly there could be an extra 50 houses on the market competing for students. If there really is a shortage of accomodation in a university town then I would expect one of these companies to be looking at building a place.

newbienewbison

Thanks for your help.

I only left 2 years ago and I still have friends who have stuck around (failed a couple of years)

The uni is only small so I am not sure if the developers have really picked up on it at the moment. However it is true that the Uni is building accomodation, as I understand it this is only aimed at the first year students for now.

I have checked and number still continue to increase in terms of applications and places......

Good info on the HMO thanks - I think I can take from what has been said that if you are sensible, do your homework, and don't try and become a property millionaire over night it still has advantages.