There are most definitely pros and cons to investing in properties that are marketed as student housing. You will need to weigh these out carefully and do your research; perhaps talk to a company like CityRise to get more insights that you might not have considered. There is no doubt that there is demand for more student accommodation, even as the tuition fees have risen. There isn’t always room in student dorms and that’s where you could come in.
Is there still a good market for it?
Despite the increase in tuition fees, there are plenty of areas that are struggling on the student accommodation front, such as Leeds, Edinburgh and Manchester. Universities here are often oversubscribed, so students are scrambling for accommodation and are finding it difficult to find student-specific housing. Some have to turn to regular residential properties, which may not be as suitable. Make sure you are investing in an area that is in high demand for more student housing.
Seasonal.
You will need to bear in mind that most student accommodation will be seasonal in nature; between roughly June and September, there may not be anyone to occupy the property, which will bring in no rent during those times. However, considering how in demand this type of housing is, it will still be a good amount of income coming in.
The right building.
Students are going to have different needs than a family or working professionals. You’ll need to consider desks as well as the usual furniture for students to study at. Most students will like the option of doing their work in the comfort of their home rather than a busy library. They may also be looking to share with their friends, so a property with multiple rooms, perhaps 3-8, might be more beneficial for you to invest in. Just make sure that you look into the guidelines and whether you need to acquire an HMO licence.
A hands-on experience.
In some cases, you may need to give the property more attention, whether it be general student behaviour causing disruptions or more wear and tear. Accidents happen; some students might get a little out of hand and cause damage. Or you might have to deal with various issues, such as plumbing problems and whatnot. Whatever the case, you might be needed more than you would be for other kinds of tenants. Even without that, every year you will need to arrange viewings and make sure the house is presentable to prospective new students, unlike regular lettings that may house a family, etc., for multiple years before they might move on.
Final thoughts.
There are always upsides and downsides, but honestly, if you’re happy to give a bit more attention to your properties and can afford a few months without rent coming in for it, this shouldn’t be a problem for any capable investors, as the benefits are high. Higher demand equals higher yield. It’s even better when you look for BMV properties to lower the initial costs.