When you’re considering what type of property to invest and the location for it, one type that’s definitely worth thinking about is student accommodation.

As recent news reports have highlighted, increasing numbers of students have applied for university this year and in university towns and cities across the UK, there is always a demand for good quality rental accommodation and HMOs – Houses in Multiple Occupation.

Even where there are universities with halls of residence, there’s often not enough room for all first year students to have a place in halls, and some want to live elsewhere anyway, and it’s common for students in subsequent years to want to move out and share a house with their friends.

Although students are often earning nothing or only a small amount from evening or weekend work, when you’ve got a shared house with multiple rooms available, you can still gain a good amount from rent and achieve decent rental yields.

Most university towns will have areas that are typically populated by students in rental accommodation and HMOs and generally property prices in these areas are lower to start with – which is another benefit for investors.

Since 2004, anyone investing in HMOs needs to gain an HMO license. Although it can take a bit of time to apply for the license and meet the requirements, such as installing fire alarms, it’s an essential and necessary part of the process.

If you’re thinking of going down this route, then researching the areas and identifying the places where student accommodation is popular is highly recommended, as you want to ensure your property is in an area where students want to live.

It’s also essential to check out the rental rates in that area – now is a good time to investigate, as properties are being advertised to attract the new intake of students – and look at what they offer in terms of fittings and furnishings.

Although it’s often assumed that student accommodation will be basic, properties offering added extras, such as satellite TV, broadband, gardening or even a cleaner, may command higher rental fees.

With property prices currently low, buying in the right place for student lets could be a great investment.

Source: David Coughlin – HBF Investments

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