How do you buy a student property?
In the latest blog post from Rooftop Living, Hyde Park, Leeds, we look at the question “How do you buy a student property?”
If we wanted to be facetious, we could end this article now with the answer “with money” but we won’t!
Now we know borrowing rates are at record lows, which is great for investors, but the flip side is that savings rates are even lower. You could be sitting on a retirement lump sum, for example, and earn just £100 per annum in a bog standard bank savings account. Something that may be safe – but is arguably a poor use of capital.
Buying a student property has some differences to purchasing a traditional buy to let property – but the principles are similar.
With a student home investment, like a BTL one, location is key. But instead of weighing up closeness to facilities, public transport, etc, you need to focus on student areas or ones that are becoming student areas.
In Manchester, this may be Fallowfield, or Withington; in Norwich, it’s the Golden Triangle and Bowthorpe; in Leeds it’s the city centre, Woodhouse, Kirkstall, Headingley and Hyde Park.
You may be tempted by other parts of the city – east Leeds is incredibly affordable, for example, and north Leeds is very sought after, but students are territorial and want to spend 3 or 4 years of their young lives in areas with thousands of other students.
Hyde Park epitomises a strong student investment suburb as it close to campuses, transport routes and the city centre. Its housing stock is geared to it too, as the area is characterised by expansive terraced properties that are perfect for investment.
Yields can be higher too with student properties, as void periods are rare and you have a group of housemates all paying rent for the house for a year or more.
You do need to seek financial advice too to choose a mortgage that is most suitable for student property investment.
Establish a budget and determine what you can borrow. It’s often said, too, that being a landlord of a student property is not something for the first time property investor. You also need to have a contingency fund available in case the property valuation falls short.
In terms of deposit, like traditional BTL, lenders will want at least 25% of a property valuation. Stamp duty is higher too on a second home.
One of the most important aspects of investing in student property is to seek not only mortgage advice, but insights from letting agents like Rooftop Living who are based in the student epicentre of Leeds – Hyde Park itself.
Students are much more discerning and demanding of the quality of accommodation they choose. If you buy a large property to convert, an existing student property to upgrade, you’ll get higher yields and less hassle by letting a company like ours, who will guide you through successful investment in student accommodation in Leeds.