Are you looking to invest in purpose-built student accommodation? It can be an extremely lucrative venture as long as you choose the right property in a prime location.
This will ensure that you generate a significant amount of interest from students, while also benefiting from high rental yields, generous rental returns, as well as the potential for capital appreciation.
Take a look these top destinations, where you could find the most lucrative student real estate on the buy-to-let market.
The city of Durham is home to one of the most prestigious universities in the UK and is currently ranked 5th in the University league tables.
Attending this academic institution is a dream for many young hopefuls and is the main reason why the area is exceptionally lucrative.
Investors can also achieve their goals by investing in purpose-built student accommodation in Durham, where demand is high and rental yields stand at 11.53%.
With such high yields and an affordable house price average of £167,574, it is no wonder that investors are flocking to this area to benefit from massive profits.
They can also benefit from an increase in house prices, with Durham experiencing a 14% rise, which is expected to grow in the future.
To benefit from this, investors should buy now in order to make additional profits in the future when selling the property on or upping the rent.
This northern powerhouse city has experienced massive growth in recent years, especially in terms of population, as more students are looking towards the capital of the north for a prime education.
In Manchester, over 99,000 students are attending the multiple academic institutes across the region, including the University of Manchester, Salford University, Manchester Metropolitan and more.
The majority of students prefer to live in proximity to their place of study, which is why companies such as RW Invest have based their developments in student-dense areas, allowing them to generate massive interest.
By looking towards locations like Fallowfield, Rusholme, and Oxford Road you can ensure your investment is worthwhile and profitable, while also offering significant benefits for students.
Another northern city that attracts thousands of students every year is Liverpool, which has three universities that are highly ranked.
This includes the University of Liverpool and Liverpool John Moores University, which are both located in the city centre. This is a prime area for student investment properties, especially in the L1 postcode, which covers the majority of the city centre including areas like the Baltic Triangle and the Ropewalks, which are popular with students.
This is because they are in walking distance from their university and are also thriving areas with exciting nightlife, excellent eateries and more.
Some students opt to live further afield, as public transport is easy to manoeuvre in Liverpool. Investors can find success in the top postcodes L6 and L7, which have yields over 11%.
These are primarily regeneration areas, so there is significant promise for investors, as they can buy affordable property which should experience a considerable amount of capital appreciation when the neighbourhood is fully updated.
How Could Brexit Affect My Investment Prospects?
The political landscape in the UK at the moment is a difficult one to predict (to say the least), and this can have an adverse effect on the country’s economy.
Not only that, but in times of uncertainty, people are less likely to want to take investment risks, or move/sell their homes with no clear idea of what the future might hold.
Luckily for investors, the demand from student tenants will continue to stay consistent and strong, in spite of what happens as a result of Brexit.
The market has grown immensely in recent years, and the number of students was recorded at around 2.3 million in 2017/18, a swelling number of which many will need accommodation as they move away to a new area rather than living and travelling from home.
One thing to make a note of, however, is the number of international EU students that come to the UK in order to study, as there is some uncertainty and mystery around how easy it will be for them to continue to study.
Currently, funds and loans are unaffected by the changes, but it is estimated that they may have to pay the higher fees as Brexit comes into effect (whenever that may be).
Offering some of the best rental yields available in the country, and also some of the most affordable prices for those looking to begin their investment journey, Student property combines to prove an attractive offering.
Student accommodation investors are also typically at much less of a risk of void periods than they would be with any other type of property.
A continual stream of students – with new young people looking for accommodation each year – means that regular rental yield payments are more secure.
This isn’t to say that an investor’s property will be automatically tenanted, however. Students are constantly looking for different things in their housing, and are no longer settling for the traditional ‘student squalor’ stereotype of yesteryear. If looking to invest in a property that is equipped to be sustainable and future-proofed in the years to come, here are some of the most popular features that you might want to consider:
- Location – As highlighted in the three different areas above, choosing the right city to invest in is crucial in getting the best returns possible. However, it’s also important to consider the exact placement of your property, and its proximity to the immediate facilities the city that It is in has to offer. Students want to be as close to their chosen university campuses and libraries as possible, while also being able to access some of the other benefits of the city, such as its bars, restaurants and general nightlife.
- Design – Luxury studio apartments and apartment spaces are becoming the new desirable norm to aim towards, for students and young people, who want modern interiors and high-quality facilities. This doesn’t mean that you have to break the bank, however. Many young people favour a simplistic, minimalist interior in their apartment, giving them the opportunity to customise as they see fit and not getting in the way of their busy lifestyle.