Discussion
Me & MrsD have been casually looking into buying a house or two to let out to students. Our area (Bournemouth) seems to be far too expensive to produce a half-decent yield, so looking further afield it appears you can still get a 3-bed house in Lincoln for around the £90k mark. Assuming an interest only mortgage on this would cost in the order of £450 per month, I should be quids in if I can get 4 soapdodgers in at say £200 per month. Anyone else doing/done this who can offer some advice/burst my bubble?
Hi Dilan, I have a lot of clients that go this route and I would have a couple of comments.
1) Student landlords are usually based local to their properties as tenants can pose more problems than professionals.
2) The yields you mention are good, but dont forget that student tenancies usually only run for 9-10 months of the year. You will therefore have planty of time to maintain the property, but lose 2-3 months rent. Potentially yields therefore drop from an excellent 11% to 8-9%. This is still very good however.
3) Most private landlords renting student accomodation are expected to include bills within the rent. Judging on a house of 4 adults (who will be spending most of their time at home watching countdown and quincy), you can deduct the gas/electric and water from the rental yield.
4) Student have NO furniture and therefore need everything from curtains to hoovers and washing lines.
5) Students can be very difficult to credit check as they have usually only had a blockbuster video card before uni.
On the plus side:
4) You will not need to renovate the property as often and can use second hand furniture.
5) Not much need to adevertise property and slim chance of it going untenanted in the right area.
6) They will live absolutely anywhere given affordability.
7) A good landlord will get a lot of referral tenants through word of mouth to other students.
8)Properties with this sort of yield should be easily resaleable. Im assuming you are mainly interested in supplementing your income through property investment? I do not know Lincoln particularly well and would question whether its a good prospect for long-term growth?
Hope this is of some help, if you want to have more of a chat then mail the link on my page.
1) Student landlords are usually based local to their properties as tenants can pose more problems than professionals.
2) The yields you mention are good, but dont forget that student tenancies usually only run for 9-10 months of the year. You will therefore have planty of time to maintain the property, but lose 2-3 months rent. Potentially yields therefore drop from an excellent 11% to 8-9%. This is still very good however.
3) Most private landlords renting student accomodation are expected to include bills within the rent. Judging on a house of 4 adults (who will be spending most of their time at home watching countdown and quincy), you can deduct the gas/electric and water from the rental yield.
4) Student have NO furniture and therefore need everything from curtains to hoovers and washing lines.
5) Students can be very difficult to credit check as they have usually only had a blockbuster video card before uni.
On the plus side:
4) You will not need to renovate the property as often and can use second hand furniture.
5) Not much need to adevertise property and slim chance of it going untenanted in the right area.
6) They will live absolutely anywhere given affordability.
7) A good landlord will get a lot of referral tenants through word of mouth to other students.
8)Properties with this sort of yield should be easily resaleable. Im assuming you are mainly interested in supplementing your income through property investment? I do not know Lincoln particularly well and would question whether its a good prospect for long-term growth?
Hope this is of some help, if you want to have more of a chat then mail the link on my page.
You don't say if you are a cash buyer.
If a mortgage is needed, you'll need to advise them that this is a buy to let situation.
You'll also need to insure it and be aware that some students won't look after the flat and could possibly do a runner, sometimes taking stuff with them.
If the students are paying the rent too, then arrears could well be a problem and moving them out even more so.
I have experience of private letting and DHS letting but not students, so I may be talking bollox. Do you know someone doing this already?
If a mortgage is needed, you'll need to advise them that this is a buy to let situation.
You'll also need to insure it and be aware that some students won't look after the flat and could possibly do a runner, sometimes taking stuff with them.
If the students are paying the rent too, then arrears could well be a problem and moving them out even more so.
I have experience of private letting and DHS letting but not students, so I may be talking bollox. Do you know someone doing this already?
Thanks for the input.
Main reason I chose Lincoln is it's got a big Uni (I think) and housing is cheap. I've looked nearer to home (Exeter, Plymouth, Bristol) but I think I've missed the boat somewhat. Any other suggestions would be welcome.
I'd not thought about Unis building their own accommodation, but would have thought students would rather, especially after their first year, live in their own house.
With regard to arrears, I would expect parents to act as guarantors, and probably look to fit key meters for gas/electric.
Thanks again for the advice so far.
Main reason I chose Lincoln is it's got a big Uni (I think) and housing is cheap. I've looked nearer to home (Exeter, Plymouth, Bristol) but I think I've missed the boat somewhat. Any other suggestions would be welcome.
I'd not thought about Unis building their own accommodation, but would have thought students would rather, especially after their first year, live in their own house.
With regard to arrears, I would expect parents to act as guarantors, and probably look to fit key meters for gas/electric.
Thanks again for the advice so far.
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