Student property is certainly a growing market for investors. Investment volumes doubled in the student housing market in 2015, with transaction volumes surpassing the £5 billion mark.
Now, with record-low interest rates and falling house prices in London, property for students in university towns is an increasingly popular choice for investors looking to get unsurpassed returns, with net rental yields as high as 7.5% in areas such as Leicester.
Stuart Law, CEO at Assetz Property, comments: “We recognise investment in student accommodation is not for everybody but its yields surpass most traditional buy-to-let opportunities and let’s face it, income is very much what most investors are seeking today.”
Who is the ‘New Student’ and how do you appeal to them?
Stuart Law comments: “The ‘new student’ is a far cry from the stereotypical untidy student, whose ambition to make the most of the party lifestyle universities provide far outweighs their ability to look after their accommodation. They are generally hardworking, discerning and, more importantly, respectful and want loyalty, high quality appliance.
In return, they will look after your property as if it was their own. Keeping to our top ten tips for student tenants living in a purpose-built student accommodation will not only help to secure a strong and positive relationship, but could also help when you come to sell.”
Top ten tips for attracting the ‘new student’:
1. Superfast broadband – regular househunters will pay an average of £23,000 extra for a house with a fast broadband connection, according to broadband provider Hyperoptic, so why would students be any different? Wi-Fi and fast broadband is essential to the modern day student, not just so they can get their latest Netflix fix, but because many find it easier and more productive to work from the comfort of their own university room. Offering them a property with this already in place will put your property ahead of the pack.
2. A room with an en-suite – students paying high rents each month for student accommodation are no longer satisfied with dingy halls of residence with shared bathrooms. The new student is looking for an element of luxury and a well-maintained en-suite with shower facilities can offer just that.
3. Appliances – although some students will prefer to bring their own appliances to their new home, such as a toaster and microwave, ensuring they have a working dishwasher, washing machine and dryer in place when they arrive at their new home shows you care about them and their hygiene.
4. New mattresses – for most, the prospect of sleeping on the same mattress as the previous occupant of your home is very unwelcome – especially when it looks like it hasn’t be replaced in the past decade. Students are no different, so to prevent any quibbles at the start of the tenancy, investing in a new mattress regularly is a good place to start in producing happy and loyal tenants.
5. Flat screen television – after hours of studying, downtime is essential for the ‘new student’ to recharge their batteries, so a large format HD television mounted on the wall in the communal area can help provide this.
6. Open plan living space – having an area available in the flat where students can meet, chat and entertain, is important, especially for those who study in their rooms.
7. Central location – students want easy access to the town centre and the university, and do not want the hassle of jumping on a train or bus, so a property within walking distance will be more attractive to students than a cheap flat in the middle of nowhere and away from other students and will be much more easier to sell.
8. Mould-free – for health & safety reasons, if nothing else, it is important to keep your property well-ventilated. If there are damp issues make sure the tenants are aware of this before they sign their contract and arrange for this to be sorted before they move in.
9. Communal facilities on the doorstep – sports centres, bars and restaurants located near student accommodation is becoming increasing popular and often a deal-breaker for students moving to a new area looking to make friends fast.
10. Inventory – walking around with an inventory inspector and the tenant once they have moved in will be beneficial for all parties. This will usually be undertaken by the management company but it is essential it is done as it provides you with time to discuss any issues and spot any damage before the student move in.
Stuart adds: “Investment in student accommodation is on the up, primarily because of the high yields it can achieve. I, myself, invest in purpose-built accommodation so I know both the risks and ultimately the high rewards that come with such property and it’s important that landlords take note of the pros and cons before making the move. Cheap halls of residence and poor quality student houses no longer appeal to students if they look damaged, old and uncared for. The ‘new student’ wants a place where they can get on with their studies in a comfortable and safe environment, whilst feeling appreciated by their landlord and cared for by the management company.
If landlords look after their tenants, the tenants will look after the property, and be happy to pay a considerably higher rent for the privilege. Investors are already benefitting from extremely high net rental yields of up to 7.5 per cent in areas such as Leicester, Liverpool and many other cities, so it’s no surprise that professional landlords and prudent parents are dipping into the student market. The key to making a success of it, however, is to ensure students feel happy and appreciated in their new home.”
