Student properties have historically offered good rental yields for landlords, but according to HSBC, student ‘housing cities’ are now the biggest buy to let hotspots in the UK.
What are Student Housing Cities?
Student Housing Cities are purpose built blocks of accommodation strictly for student habitation. They are often new build and landlords are asked to make an investment of between £40k and £60k per room. A developer usually takes care of the day-to-day management student city properties, which can be a big bonus for many landlord investors.
Top Student City Hot Spots
Cambridge, Oxford, Manchester, Southampton and Nottingham all feature in the top ten of cities most likely to give you a good return on your investment, but despite all the favourable advertising claims made by property sellers, experts are warning landlords that investing in student housing city properties is not without its risks.
“Despite the high headline yields often touted, student accommodation funds are high risk,” say financial advisers, Chase de Vere. “They are usually based offshore, are unregulated, have high charges and can suffer from poor liquidity, meaning it might be difficult to get your money back when you want it. They are more suitable for institutions than retail investors.”
The risk of losing on your investment is pretty high and if the developer overestimates the rental yield on the properties or goes into liquidation, you may be left high and dry. This type of property investment is not for the risk averse, so do your homework before ploughing your life savings into such a scheme.
