The STUDENT Investment Checklist
It’s long been one of the UK’s strongest asset class, a great investment and not likely to change for the foreseeable future. Below we are looking at what makes a decent student investment, are all student properties good to invest in. Our Student Investment Checklist below covers the major questions you will need to ask.....
Area - When looking for your next student investment you have to consider the North / South divide. In England the further south you go property prices increase considerably, certainly the closer you are to London, BUT you will also find student rental figures do not change dramatically. So with similar rental figures, but lower prices in the northern university cities, the student accommodation 'up north' will give you much higher NET returns.
Location - As is constantly banded about, Location, Location, Location, is an important factor. Don't be fooled into thinking that the closer your accommodation is to the city centre the better. Our experience has found that when it comes to specific student property the rents will increase the closer they are to the campus, and the easier they are to fill.
Cost - Student accommodation can vary in cost, but cheap does not necessarily mean bad. In many cases you will find good quality lower cost accommodation providing all the requirements needed for the students of today! Quite obviously a good quality lower cost property with decent facilities and solid rental demand and figures will provide a higher return on investment. Also in many cases developers will offer incentives to investors looking to secure property early on in the development stage, meaning the quicker you make a decision on a particular development the better the deal.
Rental Guarantee - Look for a 2+ year rental guarantee. Just a year! In this case the developer has likely built your alleged ‘return’ (guarantee) into the sales price. Student Apartments that are sure to generate strong rental returns will have at least 2+ years rental guarantees, because the developer is confident the properties will rent out. Anything less than 2 years will have a developer who is not willing to take the risk of assuring the returns.
What is the type of Accommodation? - Is it self contained, a student pod? Do you expect any capital appreciation at all? Student pods (non-self contained apartments) are not considered to be individual properties but depending on size can be purchased using a mortgage, but many student properties attract cash investors looking for strong low risk high returns. Speak to an investment consultant before making a decision so they can advise on exit strategy and expectations. Here at Residential Estates we offer an investment re-sale service providing a strong solution for our clients looking to consolidate and re-invest.
Is it fully Managed? - Who will be managing your property? Ensure your student property investment is managed by a credible company as opposed to just a non accredited company. You will find a good quality rental agent will only rent out accommodation they consider to be decent so they can be sure to attract consistent traffic/demand/good quality tenants and peak rental figures, ensuring you receive the best NET returns.
What does your potential accommodation offer? - Although the word 'student' carries a certain stereotype there are a number of factors it is wise to consider. For example foreign student numbers in the UK have been growing for sometime. Generally the standard of accommodation on offer has got significantly better year on year and that added to higher budgets means students will look to live in the better quality properties. Look for fully furnished accommodation, check the quality of furnishings and what comes as standard in the purchase, an investment consultant can advise on what is needed, provided and necessary to maximise your return and chance of high occupancy levels.
The developer - Who are they? Who are the construction company? Have they built anything else, look for reviews. At Residential Estates we will only work with developers that are either known to us, or have a proven track record so we can assure our clients that the investment they are buying is the highest quality available. Much of our business is referral or repeat, and this can only be achieved by working with the best in the industry.
Currently we have several student investments that we would consider to be strong investment developments providing 4+ years rental guarantees, high NET returns and buy back options:
Royal Riverside, Priestly Street, Sheffield, S2 4DD
Canterbury Halls, Garstang Road, Preston, PR1 1NA
For more information and/or availability on either of these please contact our office on 01244 343 355, email firstname.lastname@example.org