The success of any rental property investment hinges on the assumption there is sufficient demand in the area for the type of property you are letting out. One lucrative source of demand is the student rental market, and more and more landlords are switching on to this and turning to student lets as their primary property type. There are several key considerations to owning student properties. Firstly, the landlord should ensure there are no locks on doors. Secondly it is preferable that the students are friends and that the property is let on one AST agreement. This gives the landlord a wider choice of lenders to choose from, which is important given the limited availability of buy to let mortgages for student properties.
The idea of buying a property to let it out to students has changed a lot over the years. Gone have the days when the phrase ‘student flat’ brought thoughts such as a sink full of dirty dishes, clothes lying everywhere and beer bottles all over the coffee table. Nowadays, most students have become more reliable, and this in turn has increased the competition for the more high-end student accommodations. On average, a person is likely to fork out anything between £100,000 to £250,000 on a buy to let mortgage for student lets, and this market, at present, is very profitable for landlords.
There are a few things to consider when looking at a buy to let mortgage for student lets. One of the most important factors is finding the right location, which not only needs to be close to a university or college, but also near to the main student hotspots. Students require bars, supermarkets and takeaway shops within walking distance of their accommodation, as the majority of them won’t have their own form of transport. Another thing to consider is whether or not the students occupying your property will be paying for the whole year round. You’ll find that must students will pay during the summer months, even though they’re not living there, just to keep a hold of the best property. This will give you a chance to freshen up the interior, if required. If the students decided to move out over the summer, you need to either replace them with students who are prepared to pay while not living there, or be prepared to take a hit financially.
You also need to consider whether or not you’re going to buy a house or flat. A house might allow you to have more students move in, which would increase your rental profit, but a flat near to a university or college might be easier to come by. A few other key considerations for landlords letting out a flat to students include, a preferable 12 month agreement signed for the flat, not just individual tenants, receiving a realistic deposit (one month up front), if you house any more than five tenants, you must acquire a Homes of Multiple Occupancy licence, which is valid for five years, and it also might be worth obtaining a parent guarantor in case of any damage to the property or unpaid rent from the tenants.
For specialist help securing the best value buy to let mortgage for a student property contact Ascot Mortgages, an experienced buy to let mortgage broker, whether you are looking for your first BTL mortgages, or you are looking to remortgage your buy to let.
Ascot Mortgages offer a comprehensive range of mortgages from across the market. We are dedicated to providing the very best financial advice and the highest standards in customer service.
Please contact Ascot today, and you will be very glad you did.