RICS offer 10 points to help parents investing in student property
Some parents are opting to invest in student property for the benefit of their children which will then make for an ideal future investment.
The 10 points:
1. Research the location
2. Know what you are buying
3. Buy a student property
4. Furnish accordingly
5. Plan for the future
6. Avoid the void
7. Self-manage vs agent
8. Rules and regulations
9. Check local licensing laws
10. Use a regulated agent
Many people are already aware of the fact that the face of the student property market is changing and it seems that people are aware of the lure of the sector for buy-to-let investors because of the high returns that can be obtained. This has led some parents to believe that the best thing to do is to purchase student property for their children, this is especially true for the parents of overseas students.
Student property can be one of the best investments a parent can buy as long as they do their homework whilst keeping in mind that squalor is no longer the norm for the average student. Peter Bolton-King, Global Residential Director at the Royal Institute of Chartered Surveyors (RICS) has given some tips for purchasing a student let.
Firstly he says to research the location as students will want a centrally located property which is close to the university whilst being in easy reach of the city centre where they can use their student discount cards to their hearts content.
Next is know what you are buying, buy a student property andfurnish accordingly. Renovating an old property can require further expenditure and students expect their property to be fully-furnished. Many students now prefer self-contained studios and apartments which come furnished, so this could be a better option especially with traditional house shares no longer being favoured. It is also important to remember that the property will need to be student-friendly, so it needs to be to their taste and not to yours. This means that the expensive chandelier that you saw in the department store will not be necessary!
If you are wanting to sell the property after your child has left university it is important that you plan for the future meaning that you need to obtain a property that is sure to sell in the future. Certain types of property are more likely to sell than others so checking the latest student property news and asking the experts for help will stand you in better stead.
King also said to avoid the void since taking out a loan or mortgage to pay for a student property is more than likely to require monthly payments which will still need to be paid when students go home for the summer. However, some studios and apartments are more favourable as they have 51 week lets. It is important to fully look into financing your investment beforehand.
There are tons of management companies nowadays which leads to the next point, self-manage vs agent. By managing the property yourself, you can save money but you will be required to carry out maintenance yourself whereas a management company will take care of this for you so if you work full-time or are an overseas investor then the latter would definitely be the better option.
As with any property investment there are a number of legal aspects to look into which leads to king’s final three points rules and regulations, check local licensing laws and use a regulated agent.If you do opt to self-manage then you need to ensure that you look into the rules and regulations about what to do should a sticky situation arise such as a tenant withholding rent. You may not be aware of the area in which you are buying if you are investing somewhere a little further away from home, so make sure that there are no local laws that affect your purchase. If you decide to use an agent for the management of the property make sure that you use a professional who tells you everything upfront so that you know exactly what you have to pay out and when.
If your child has just started their final year at college then now is the perfect time to get your thinking cap on and start planning for the future so that you and your child can get your investment underway.
Article courtesy of Select Property
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