If you have the up-front capital to invest in a property, there is some serious money to be made in student housing. For years, small-time investors have been looking at buy-to-let investments as simply a way to make a little extra money here and there, with no real long-term financial gains. However, those who have managed to tap into the student accommodation market are beginning to see some big returns in a relatively short space of time. Do likewise and you’ll have an ongoing cash cow that’ll pay dividends.
What Makes It Such a Sound Investment?
For someone new to the world of real estate, it might seem questionable that students â€“ reputed to be amongst the poorer members of society â€“ might provide a great source of income for anyone. This is far from the truth though. In the United Kingdom in particular, students receive fairly substantial loans, allowing them to fund both their studies and their accommodation without needing to enter active employment.
Accommodation fairs (events put on by universities in order to find housing for the duration of students studies) are centred on finding housing for students, specifically within designated ‘student houses’. As naturally, most students would rather live with other students, but are too young to be able to take out a lease on a full property. What this means is that landlords of student homes have an effective monopoly as far as housing the local student population in concerned, which enables them to charge more. For instance, whereas you might only charge Â£750 per month for a 3 bedroom home, with a student house you could quite reasonably charge in excess of Â£1100 (for example, Â£380 per month, to be paid individually by each student in your house).
Maximizing the Property’s Potential
Generally speaking students aren’t overly picky regarding their living quarters, so you probably won’t need to renovate the house or make any large-scale changes in order to guarantee a good return. A fresh lick of paint every year though and a decent furniture package from David Phillips (or a similar company), will allow you to increase the rent even more.
Great Financial Returns
Buy-to-let has to some degree always been considered a bit of a small-time investment. Student housing expels this myth though, showing that anyone â€“ provided they have money up front â€“ can experience great financial returns on the student property market.