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THERE is a lot to be taken into account when it comes to considering student property investment.
Students across the UK have among the worst reputations when it comes to the property market. Large groups of young adults living together – often living away from parents for the first time in their lives – added to alcohol and a need to stand out, can mean a tough time for landlords.
The life of a student, and the freedom that brings with it, can have a negative impact on a student property investment. It is important to remember, though, that is a small percentage who give the rest a bad name. If you factor in the chance of mess and damage to a property, student accommodation still offers some of the most lucrative returns for developers and investors in the property market.
Due to the nature of the rent, and the fact that buildings are normally located in high areas of student housing, tenants are almost always guaranteed each year and offer a high yield for an investment can be expected.
Some things do need to be taken into consideration, though and one of those would be damage.
It’s a well-documented fact that the majority of students like to party, they like to drink and they like to have fun and most of all, they know that a property is not one they own.
When you factor in all of these it can be expected that damage will come hand-in-hand with a student home.
Not all students are the same, but a small minority won’t take responsibility for their actions, meaning that you are likely to pay the consequences for their actions.
To counter this it is wise to budget in an allocation from the profits to be put towards repairs and other maintenance.
One of the good things about student accommodation is even with this outgoing, returns on investment will still be high. Another thing to be taken into consideration is lack of care.
This goes hand-in-hand with damage, as a small fraction of students are known to ignore or leave things that need seeing to.
Whether it be a problem with the shower, a kitchen cupboard that is broken or a window that has a crack, students do not always come forward with problems.
This could be due to a fear of loss of deposit but it can mean that simple repair jobs can become expensive and time-consuming tasks when left in disarray.
To counter this arranging inspections by the landlord or lettings agency can ensure that these are addressed instantly and save all parties a lot of time and hassle.
The last thing to be taken into consideration should be the turnover of tenants.
Most rents last the nine months of the academic year, this turnover means that developers and owners who partake in student accommodation investment will see a wide variety of people living under their roofs at any given time.
The demands of such a accommodation can lead to a constant change within the decor of the property. Many students will want to make small changes to suit their individual styles.
Most landlords allow a slight change to be made as long as it is not the detriment of the property.
Despite all the pitfalls that there might be, student property investment remains one of the best ways to receive a return on investment.
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