Student property or buy-to-let: Where should I invest?

The last couple of years have seen a lot of changes for landlords, leaving many looking at alternative options to the buy-to-let schemes they have been used to.

The buy-to-let market was once seen as an easy path to profits, but changes in mortgage requirements, the scrapping of mortgage interest relief and an increase in stamp duty have left many landlords questioning whether the traditional buy-to-let route is the right route for them after all.

The buy-to-let market

Property investors have been feeling the squeeze recently. Restrictions on the profits an investor can enjoy and extra hurdles in being able to invest in the first place mean investors are changing how and where they spend their money, with some withdrawing from the market altogether.

Whilst the government has aimed to make life better for tenants, the extra pressure on landlords will eventually filter through to their renters and prices are driven up. It seems only wise that investors now look at other ways in which they can use their money to the best effect.

Student property

When investing in property the most successful portfolios are diverse. Many investors are now finding that adding student property to their list of acquisitions is both profitable and easy.

Student property is not what it once was, as the days of the bedsit are gone. There is now a strong movement towards purpose-built student accommodation which is designed with the increasingly discerning student in mind. These developments are commercial properties which provide living spaces for many students at once.

The investment opportunities of purpose-built student accommodation present different types of tenancy agreements to typical buy-to-let contracts. This means that students can choose to vacate the property of the summer where you can let it out to tourists or business people, or they may choose to extend the cover for the whole year.

Another advantage of student property is that they are usually subject to some form of on-site management. Having staff on site means that issues are dealt with immediately and no involvement is needed from the investor. This makes it an easy and stress-free investment for many who do not want day to day involvement in their properties. These properties are built to high specifications, and often have desirable on-site facilities to make them a more attractive prospect. Many students, particularly those from overseas, have much higher expectations than in the past when it comes to where they will be living, so these purpose-built units are very appealing.

The rental market is carried by supply and demand, and when it comes to student property, that demand is strong. In most major university cities, the number of students far outstrips the amount of accommodation available, meaning that occupancy is unlikely to be an issue.

With so many investors wondering where they should now put their money, the new trend in student property is certainly turning heads. High occupancy rates, on-site management and good rental returns all signal that student property is set to be the next boom in the buy-to-let market.

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DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.