Q. I never realised how lucrative student accommodation could be until my daughter started university last year. And since she still has another three years left I am considering buying something for her to live in for now and then continuing to rent it after she finishes her degree. Do you think this is a good idea and something worth investing in?
A. Student accommodation is indeed very profitable as long as you carefully carry out your research beforehand to find out what type of property rents out the easiest as well as focusing on a small radius in and around your chosen university. Year on year the demand for student accommodation is high given students are given no choice but to move out of campus after the first year. Obviously they all need to find somewhere to live so it is pretty much guaranteed that you will have continued occupancy with very little void periods if at all given most students will stay at least two years, and even if they are not renewing and perhaps in their final year the agents tend to advertise the property up to six months ahead of time to secure the next set of tenants. It’s also worth exploring the local agents that have the market on student accommodation and getting them to manage the property for you. These agents will usually be on the list of the universities preferred choice for housing, hence receiving the most direct traffic from students. They will also be used to dealing with renting to students which can be very different to a regular let given the rent is often split between several students all of which usually need guarantors too. You may also find that one student will want to leave a property but three may stay on so using a specialist agent would be preferable given they are very adaptable and already have everything in place to facilitate these type of changes if and when the need arises. And finally do remember that student accommodation usually falls under ‘houses in multiple occupation’ (HMO). A landlord may need a licence for this type of property as well as meet extra responsibilities which are in addition to your usual repair responsibilities as an owner of student accommodation.