Where there are large universities, there will always be undergraduate and postgraduate students, plus lecturers, in need of accommodation. Although many universities offer good on-campus accommodation, there is rarely enough to cater for all students and some people will always prefer to live off campus anyway.

In some areas, there may already be an overload of student rental properties, but one way of finding an area that may become even more of a hotspot is to look out of universities that are expanding, offering new courses or are experiencing an influx of student applications. 

Is student property in demand?

One issue that is always worth exploring, whatever property you are looking to buy, is what the market for tenants is like. After all, there is no point buying a property with a view to letting, only to discover that you can’t get any tenants. When it comes to buying in university towns and cities, this issue comes into its own as, as long as you’re buying the right type of property and in a popular rental area, you could end up with a stream of tenants on a long-term basis.

What’s more, there are several possibilities for landlords buying in university towns and cities, as properties can rented as HMOs for several students, small studios or flats for one or two students, or properties aimed at post-grad students or lecturers.

University towns and cities aren’t just locations where you’ll find plenty of students needing accommodation though – often there are lecturers and older post-grad students studying in the area who need rental properties too. Whilst younger students may be happy to live in the heart of student land, lecturers are unlikely to want to, so choosing a property away from the typical student zone can be a wise move.

Likewise, some graduates may want to stay within close proximity of where they’ve studied once they’ve graduated and got a job, so you could hone in on this market too.

Whatever your plan of action, it’s important to research the market in university towns and cities carefully, so that you can identify the areas where students and lecturers like to live and the types of properties that are favourable. Once you’ve purchased a property, advertising and marketing your property in appropriate ways will help, especially if you can get listed on the recommended university rental accommodation lists.

Finding Property Hotspots Part 1 – Transport Links

Finding Property Hotspots Part 2 – Regeneration Schemes

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