It’s the time of year when many students up and down the land are starting to see the light at the end of the tunnel. A level courses are coming to a close, the exam period is just about here, and 18 year old whippersnappers across the country are starting to realise that all the fun and freedom of university is just a few months away.
Of course, most freshers will have already sorted their accommodation and will be gearing up to living in university owned halls. But, with rents of anywhere around £500 per month per student, it can make lots of sense to get into the student letting market. This is often why parents of prospective students opt to buy a second property for their own offspring, and later to rent to other groups of students.
Buying to let specifically to the student market needn’t be the preserve of those biologically invested in good homes for their children.
Canny investors know that buying a student property to rent out can make an awful lot of financial sense.
First off, according to The Telegraph, students make for very reliable tenants. After all, they are likely to want longer contract terms of 9 months to a year, and they are heavily backed up by the very stable bank of mum and dad.
In addition, also according to The Telegraph, there are good yields to be had. Looking for a university town with a new university is a very shrewd move as this means student numbers, and property values will rise. It is also worth targeting groups of overseas students who are often extremely wealthy and are prepared to pay the extortionate overseas student fees in exchange for the quality of education afforded by British universities.
So where should you put your money?
Glasgow tops the buy to let yield charts for residential and student lets. With house prices averaging £262, 888, and an average yield of 4.95% investing in the second Scottish city makes good sense. According to the LendInvest Buy-to-Let Index, Glasgow comes first place with its excellent buy-to-let yield statistics. With a total yield of 8.90%, the Blythswood Hill area of Glasgow is growing in popularity with students thanks to its central location.
Liverpool not only ranks highly in buy to let yield surveys, but it also has an extremely healthy student population and a low average house price. According to the HSBC, rental yields in Liverpool are around 6.56%. Potential investors could do worse than begin with Kensington, and Toxteth for student hotspots in this thriving and creative city by the sea.
Finally, with one of the country’s largest student populations, is Manchester. Anyone buying to let in the Manchester area needs to head to Fallowfield. With students galore and some big University halls, this area is well set up for students. Manchester comes in third place on the LendInvest Index with an average yield of 4.59%, and an average house price of a more eye-watering £275,132.
As ever, make sure you have done your research before you part with any cash. You’re looking for high student demand, a decent supply of property, and an average monthly rent that will make your investment work for you.