Three good reasons why investors are turning to student property

Three good reasons why investors are turning to student property

Investment in student property is booming at the moment. More and more people are turning to student property over other forms of property investment and there are three good reasons for this – arrears, void periods and maintenance. With student property investment you can avoid these three areas that are the bane of many a landlord’s life. Let’s explore in a bit more detail.

Arrears

It is well documented that with traditional buy-to-lets around a third of landlords have experienced rent arrears at some point. According to figures from the National Landlords Association, the average unpaid rent in the UK adds up to approximately £1,650. The fact is that with student property this is far less likely to happen. The vast majority of UK students will have their rent paid directly by parents and it’s not unusual for parents to make block payments upfront for student accommodation which means you don’t have to worry from month to month about the rent coming in. There are also many international students in the UK who tend to have their rent paid upfront by their parents.

Void Periods

With traditional buy-to-lets, void periods can sometimes be a problem. Most landlords will rely on receiving rent to pay all or part of the mortgage on the properties they own. So, if the property is suddenly vacated due to the existing tenant leaving without notice, a landlord can find themselves in a very awkward predicament trying to pay the mortgage with no rent coming on. If you add to that the hassle of having to remarket the property and source new tenants, it’s easy to see why investors are starting to look at hassle-free options such as student property. With student property investments, void periods can be easily managed and built into the overall rental rate that you command. Demand for student accommodation is very high so void periods are pretty rare. Not only that, void periods are easily predictable i.e. outside of term times. This means that landlords can easily plan for them.

Maintenance

One of the main hassles of being a landlord is dealing with repairs and maintenance. With traditional buy-to-let properties, if a property becomes damaged or needs some kind of maintenance, then the landlord will be the first person the tenant turns to. As a landlord this means you will have to deal with phone calls, organise tradesmen, arrange for visits and repairs etc. This can be very time consuming and stressful, especially if the tenant is very demanding. With the vast majority of student properties there will be a management company in place that will handle these types of issues on your behalf, which means less stress for you and a hassle-free investment.

Student property investment is the top performing investment class in the UK and many savvy investors are now turning to student property to build their portfolios. It’s easy to see why.