Thinking of investing in student buy-to-let property? You’re not alone. The student market is worth £46 billion to the UK economy, is only expected to grow further by the end of 2018, and is home to four of the top 10 universities in the world. Student property investment offers high rental returns, the potential for long term tenants, and growing demand, but before diving into your first student buy-to-let investment, there are a few things you should think about first. Take a look at three things to consider before investing in a student property.
The area that you choose to invest in makes a big difference when it comes to student property. Certain areas in the UK have a higher population of students than others, which ultimately means more demand for student properties. Northern cities like Liverpool and Manchester are becoming more popular for student property investment due to an increasing student population along with more affordable prices, both for the student and the investor.
Cities like Liverpool and Manchester offer everything a student wants. Bustling nightlife, world-class universities, great transport links, affordable living costs, good shopping and amenities and a wide choice of housing options is the hallmark of a great university city to invest in. The closer the property you choose to invest in is also a major factor, as most students would rather be in walking distance of their University campus, while also being close to friends and nightlife.
The Target Audience
If you’re investing in student property, your target audience is going to be limited to students. While you might feel a bit restricted by this, there are lots of different types of student you can cater for in terms of investment, all with varying results. If you’re catering to students with a lower income, investing in shared housing may be your best bet, whereas properties such as luxury apartments are more prominent with more wealthy students.
This type of modern, fully furnished apartments are becoming more and more popular in recent years, with the changing views and attitudes of students who value their privacy and want a higher standard of living. Luxury student property is also common with international students, for which the UK has seen a big influx of in the last couple of years, with 450,000 international students heading to the UK in 2016/17. Chinese students are among the most popular type of international student, which is good news for property investors who are worried about tenants leaving the city during term times.
Budget is always something to think about when making an investment and should definitely be considered before investing in property. The area you choose for student property is the difference between a pricey investment or a more affordable venture. Whilst cities like London are popular with students and home to several world-class universities, property prices are much lower up North. The average price for a house in London in 2017 was £671,412 — a far cry from the £158,299 you can expect to spend on average in Liverpool. Property development companies like RW Invest offer student property in the North West from as low as £45,450 with an 8% net rental return.