Property Investments
Free Research On Student Property Investments For Landlords
Property investments are not only the remit of professional landlords. Many first time landlords are also dipping their toes into property investments, especially if they have university age children. The advantages to parents of making property investments in student flats are obvious. It is a good way to provide rent-free accommodation for an adult child. The other rooms can be rented out to cover the mortgage payments. You have a built in on-site property manager and you can pocket any excess money for a short term boost in income.
In the long term, property investments make sense because history has shown they increase in value. Property values in the top 20 university towns have fluctuated at the same rate as non-university locations, meaning property investments in student flats can meet both short term and long term goals.
While some BTL mortgage providers shun student lets, there are plenty who have no aversion, with about 40 lenders in the field. What parents have to look out for with these property investments is the legislation surrounding the management of student flats.
In particularly, parents making property investments of this type need to be aware of the government's rules on licensing houses of multiple occupation (HMOs). The typical HMO is very similar to the typical student house, with three storeys, five or more tenants from different families and shared kitchen and bathroom facilities.
BTL HMO Licensing
HMOs now have to be licensed by the local council and investors need to be aware of the regulations and the fees before investing in student accommodation. The legislation is intended to ensure that student accommodation and similar accommodation is maintained to a certain minimum level. However, the criteria for obtaining a five year licence and the fees for doing so can vary considerably between councils, so it's worth investigating the rules before undertaking any investments. Fees can be anywhere from £100 to as much as £2,000. This may be an unwelcome additional cost for parents who are contributing to their offspring's education as well as investing in property to secure their accommodation.
Although parents may make an investment in student accommodation to meet a short term need, it is worth considering it as a long term plan. This is because the average lifespan of a buy to let, according to the Association of Residential Letting Agents (ARLA Jan. 08) is 16.7 years. It may take that long to make the most of your investment.
Property investment should not be entered into lightly, especially with the regulatory compliance required. In fact, it is best to seek professional advice. There are many mortgage brokers who specialise in buy to let property and who will be able to give advice on all aspects of the deal, from purchase to maintenance to regulatory compliance. For parents who are new to BTL, this maybe the best way to get started with student property investments.
