Investing in student accomodation?

PinkJet

We are a couple with 2 young people in our family away at uni in their first year.

We already own 3 rental properties between us, so are not naive about BTL and the pitfalls. However, we currently rent properties in our town on AST's, so are close to hand and have long term, generally quite well behaved tenants. :rotfl:

One of our kids is studying at the university of Nottingham and we have noticed that property prices are low in that area and wondered if it might be worth considering investing in a student flat / house in that area. I am aware that we would need to do plenty of research to find out which areas are "less desirable" than others, as currently we have no idea.

Has anybody else done this and can advise on pitfalls and benefits of doing so? We are around 3.5 hours drive away from the university.

anselld

Student rentals need more management than most. I would personally not consider from that distance.

PinkJet

I must admit, I think we would need a managing agent to help us and having had experience of local agents, this doesn't fill me with joy. We now manage our own properties.

However, as my son would be living in the accommodation, he could do some of the managing, although I'm not sure that's entirely a good idea either as it puts a certain amount of responsibility on him.

anselld

PinkJet wrote: »

However, as my son would be living in the accommodation, he could do some of the managing, although I'm not sure that's entirely a good idea either as it puts a certain amount of responsibility on him.

That is true. Many BTL lenders are also funny about rental to family members or even allowing them to occupy.

Guest101

Student rentals are really no different except there's HMO regulations (and registration?) and it's empty for 15% of the year.


Typically it needs to be furnished and the students union may have a list of approved landlords, but with T&Cs

silvercar

If you are keen on this you should look into the advantages in your offspring buying the property and renting out the spare rooms. That way the tax savings mount up. Google rent a room scheme (£7500 tax free). No CGT on sale.

For student lets it is very important to buy in the right area, a difference of one or two streets can mean the difference between having tenants and not. Nothing worse than a student rental property empty in October and knowing the next batch of students won't be arriving for months.

dlmcr

I actually live in Nottingham and can say that the provision of student accommodation market is absolutely saturated. If you want evidence of that go around the town and look at all the massive numbers of student flats newly built in the last 8 years and that is on top of traditional strudent housing in traditional areas.
The demographics of student populations especially for the University of Nottingham (the posh one) has been moving towards more Asian students and they prefer and have the money for "self contained" purpose built apartments rather than rooms in shared houses. A lot of landlords such traditional house share setups in traditional student areas such as Lenton have been selling up due to underutilisation of their properties and I understand that in certain parts of town no new licences (sorry I don't know the actual term for this) for student accommodation will be provided by the council.

PinkJet

Having looked at this, I wonder if it's worth investing in one of the self contained student flats mentioned by dlmcr for DS to live in. Student rental accomodation is around 5k per year and we have agreed to fund the kids accommodation. If we invested in one of those self contained flats (if it's suitable for DS) then assuming we could sell it at the end of their uni education, it could be a good option? Just depends if the market is saturated, we could end up with a flat that we can't sell or rent to anyone else at the end.

silvercar

PinkJet wrote: »

Having looked at this, I wonder if it's worth investing in one of the self contained student flats mentioned by dlmcr for DS to live in. Student rental accomodation is around 5k per year and we have agreed to fund the kids accommodation. If we invested in one of those self contained flats (if it's suitable for DS) then assuming we could sell it at the end of their uni education, it could be a good option? Just depends if the market is saturated, we could end up with a flat that we can't sell or rent to anyone else at the end.

Most students want to live with others rather than on their own. I know I'm stereotyping, but UK students tend to want the whole experience of student life, including the social aspects. Foreign students are more likely to want (and afford) self contained units because they are prioritise their studying over everything else and tend to be less social.

Ask your offspring if they would want to commit to a self contained flat for 3 years.