It's that time of year again, where many young people start a new and exciting chapter in their lives, many leaving home for the first time.
Terry Holmes, Director at independent estate agent, Beresfords, shares his top tips with parents and students and suggests how investing in a student rental may be a more sensible option.
Instead of wasting money paying rent to house their children whilst at University many savvy parents are instead buying a suitable property in the relevant area close to Campus. Before buying anything for this purpose firstly establish the overall game plan. Do you want to continue letting as part of a longer-term retirement strategy or want to cash in your investment straight after graduation?
1: If funding is required don't just speak to one lender. In fact some of the most competitive are not visible ''high street'' brands and will use Intermediaries like Estate Agents to promote their products. Let the agent do the 'leg work' for you! They also have much greater bargaining power in terms of rates due to the volumes of work they generate for lenders.
2: If the budget allows then a property with more than 1 bedroom is sensible as other students can also be housed and some form of income generated from the rent they pay. Even better if there is a main bathroom plus a separate en-suite as then not all the students are sharing one facility. It's always best to talk to reputable local agents who are active in the local rental market as they can offer some good tips in terms of what and where to buy.
3: Make sure you buy a property that will not only be easy to rent out to other students once your own children have finished at University but is in a desirable location if it needs to be sold in the future.
4: Students will expect the property to be fully furnished with a working oven, microwave, kettle etc. but other things such as a good broadband connection and a modern flat screen TV might help separate your property from others which may be available at the same time. However don't overspend as we all know what a lot of students can be like so there may be a need to regularly replace certain fixtures and fittings especially furniture.
5:The chosen property must be within easy reach of Campus. Properties located too far away will struggle to attract interest as students will not want to rely on buses and trains. Anything within a short walk will be most popular.
6: Avoid properties which are quite old as you would not want a lot of expense in updating the property. Ideally target modern properties that will have minimal upfront costs.
7: If your budget allows try to buy a freehold house or purpose built maisonette as these will not have annual maintenance charges imposed by freeholders. If a purpose built apartment is the preferred option then just establish the fixed outgoings at the outset so as to avoid any nasty surprises once you have completed your purchase. Remember fixed annual maintenance charges for the upkeep of the external areas cannot be passed on to the tenants themselves.
8: Managing a live tenancy yourself can be both daunting and time consuming. The best option would be to appoint a reputable letting agent who is a member of ARLA (Association of Residential Lettings Agents) as they have to adhere to a strict code of professional conduct. The related fees can be offset as legitimate fees from any rent which may be received. Also students can be quite demanding tenants so best it's left in the hands of an expert.