Property investors looking to enter the Buy-To-Let market could find that Leamington Spa and Warwick offer some great opportunities. With the University of Warwick on our doorstep, several local colleges, and Coventry University not that far away, student rental properties are always a good investment for landlords in the area.
June is a great time to start looking for a suitable student property in Leamington Spa or Warwick, as people wishing to sell existing student lets put them on the market as we near the end of the term and educational year. However, don’t confine your search to properties that are already in the student market – broaden your search to include other properties too and find out whether they have potential for becoming a student let.
5 Essential Tips For Finding A Student Rental Property
While changes to Buy-To-Let regulations – 3% stamp duty surcharge from April 2016 and plans to axe Buy-To-Let mortgage interest relief and replaced it with a 20% tax credit – has made some would-be landlords reconsider their options; lenders have slashed mortgage rates on Buy-To-Let mortgages making the market still attractive for others.
However, low mortgage rates will eventually go up which is why you must ensure your Buy-To-Let income investment opportunity stands this test. The good news is that the student rental market is always buoyant in Leamington Spa, Warwick and Coventry, and therefore your property is highly unlikely to stand empty for any length of time. Here are our tips for finding the right student property:
1. Research Your Market: We’re fortunate to have a steady flow of students needing accommodation, 23,570 students at the UofW in 2015, but they still need the right property to meet their needs. Price, location, access to public transport, are all key factors that will determine whether a property is a good investment. It’s always a good idea to get advice from an agent with experience renting student properties before you buy, or ask them to compare different opportunities and find out what they think.
2. Be Careful Of ‘Student Pod’ Investments: You may have come across property developers building student accommodation in university towns and selling studios or ‘student pods’ to investors. These guarantee an income and also manage the rental for a relatively low investment. However, if you’re tempted by this hassle-free solution, do your homework first. Some investors in other parts of the country have found that the promised rental guarantee doesn’t materialise because of overestimates in the rental market rate. Also there will be management fees to take into account, which you won’t have any control over unlike with a traditional Buy-To-Let investment.
3. Students Don’t Want To Slum It Anymore! Buying a rundown property and doing the minimal amount of work on it, before putting it on the student rental market is not really an option anymore. Students would actually prefer to pay more for better accommodation, and this also means they will generally look after the property better too. So consider property that is perhaps more ‘exclusive’ as well as the traditional Victorian student house – we currently have a two bedroom / two bathroom luxury apartment in Leamington Spa that is already getting a lot of interest from students looking for accommodation from September.
4. Consider Maintenance Costs: Period properties inevitably require more work over time than more modern buildings, so when looking at potential student rental properties factor these costs in too. If the property is already being rented, ask for an idea of how much maintenance costs are per year – but also make sure you get a full survey, you don’t want any hidden surprises.
5. Location Isn’t Everything: Remember, you’re not buying a family home so location factors that are important to you may be less so for students. For example, you may not want to live on a busy road, but for a student being on a main bus route to their campus could be a selling point. Similarly, the view of the ugly 60s office block may not be such a disadvantage if it means that they’re close to Uni or the town’s nightlife.
Most students will have to reply to offers in June, which means they will start to think about accommodation soon afterwards. Although that doesn’t leave a lot of time, if you have your finance in place it’s still possible to snap up a great income property and get it on the market in time for the new student year.
If you would like to explore your options for buying and letting student properties in Leamington Spa, Warwick or Coventry, please contact us.