Sustainable Income from Student Buy to Let
In the UK, residential property investors have had a tough time over the past two years because of falling property prices and falling rents. Yet one sector of the but to let market has done better than most with better rental yields and good occupancy and that has been student buy to let. Moreover, the outlook for this part of the market is really bright.
Most people shy away from student lets when thinking of buy to let investments. They worry about the fact that tenants are transitory and change over every year. And everyone has a clear idea that students all drink too much, throw wild parties every weekend, smoke pot in the living room and generally ruin the place. In addition most student accommodation needs to be furnished, which means additional upfront expenditure by the landlord as well as additional costs in annual landlords contents insurance. Many investors think that when they add up all of these factors then they would be much better off staying away from this part of the market.
The truth is somewhat different and investors in student buy to lets have done well in recent years with rental yields that are considerably above average.
The main reason for their success is that rents are pretty good while investment costs are relatively low. With yields that are pretty good investors have been well rewarded for this additional risk. Moreover students have an undeserved reputation. They are less likely to damage the property and furniture than many people think. They are also likely to be more tolerant of minor defects so you need not repaint the place quite so often. They also won’t insist on the highest quality of furnishings.
This is also a growing area. Forecasts all predict a huge rise in the student population in coming years with real shortages of accommodation in some student towns. With many parts of the buy to let market looking unattractive at the moment, student buy to let is one area worth further consideration.
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