Investing in student property is proving to be popular with a new generation of investors who do not want the hassle that can often be associated with traditional buy-to-let investments. With student numbers growing and a lack of quality accommodation to house them, the development of high specification PBSA (Purpose-Built Student Accommodation) is much needed. And compared to your average buy-to-let property, there is a lot less hassle when it comes to being a landlord because there’s no refurbishing or property management to do. Over recent years, investment in PBSA has delivered higher yields as well so it’ s little wonder that student property investment has been so sought after by investors.
Where first-time investors go wrong
Unless you know what you’re doing, it can be easy to get your fingers burned with traditional buy-to-let investments. Many first-time property investors have invested in the wrong area, spent too much money on refurbishing, not identified who their target audience is properly and, as a result, have suffered long periods of void occupancy with no rent coming in to cover their buy-to-let mortgage.
With student property, you don’t have these problems. You immediately know who your target audience is and what they are likely to want from their accommodation. As long as you invest in PBSA in the right areas which are in easy distance to the university campus then you can pretty much guarantee occupancy.
Here are some other reasons why investors are being drawn to student property:
Management/Maintenance – virtually all PBSA properties have management companies that look after all aspects of maintenance and management of the property. They deal directly with the students so that you don’t have to.
Rent Arrears –when it comes to students, it’s pretty common for rents to be paid directly by parents, especially overseas students. Rents also tend to be paid in block payments at the start of a rental period so there’s usually no hassle about chasing arrears. It’s well known that student properties experience significantly less rent arrears problems than traditional buy-to-lets because of these facts.
Void periods – there is high demand for PBSA so occupancy levels are far more predictable and you will know exactly when you will have rent coming in. Buy-to-lets tend to be more volatile when it comes to void periods and this can be particularly stressful if you are trying to pay the mortgage whilst the property lies empty with no rent coming in.
If you’re investing for the first time and want it to be hassle-free then PBSA might be the answer. Contact us now on 0333 3001 888 to discuss the opportunities available.