Student landlords beating buy-to-let by Finance News Bulletin

Published: 04/11/07

Landlords who rent out properties to students are making better returns than the relax of the buy-to-let market – with Durham delivering the best presentationEDUCATIONAL INVESTMENT: Student lets are delivering senior returns than the rest of the buy-to-let marketThinking about investing in possessions This is Money has the best buy-to-let in order and advice >> Buy-to-let tipsProperty investors in student towns can expect an average rental give way of 6

59%, which is more than 1% better than the standard rental yield in England of 542%, according to new information released by buy-to-let agent Landlord MortgagesThe figures are based on rent being paid for 12 months of the year and potential scholar landlords should beware that the educational year is shorter than thisHowever, in most institution of higher education towns it is common practice for students renting from private landlords in the direction of have in the direction of take out 12-month tenancies, with the potential for reduced rental fee during July and August

But while scholar landlords who choose their areas wisely may benefit from robust performance, those who be unsuccessful to do their homework could find their investments be unsuccessful to deliverThe rental yield – the percentage of a possessions's price returned in annual rent – for a scholar landlord in Durham was 912%, according to the learn, while that in Crewe, Cheshire, which is home to Manchester city University, it is just 34%

According to Landlord Mortgages, buy-to-let investors in university towns trade a three-bedroom house would find the average property price £141,000 and delivered an average paper rent of £60 per week per scholar, or £9,290 per yearBut those choosing to purchase a property in Durham would advantage from both lower than average house prices, picking up a three-bed possessions for £114,600, and higher than average rental fee, receiving £67 per week, per student, or £10,500 per yearIn Crewe, a landlord would require to find £171,000 for a similar possessions but typically get only £37 per week per student in rental fee, or £5,806 a dayLee Grandin, managing director of Landlord Mortgages, said: 'Students can be a profitable group to rent to - providing you choose the correct location

Whether you are entering the marketplace as an saver in student property, or as a parent buying accommodation for a child at university, the income can be substantial''Landlords should, however, believe their purchase through carefully Local knowledge is of utmost significance, and landlords must also consider all of the habits in which renting to students differs from the average rental property'For instance, properties must be provided furnished, including certain items of furnishings suitable for students, and there is the possibility of the property being returned in a less than ideal state

'The Landlord Mortgages survey showed Nottingham offered the second-best returns at around 9% a day, followed by Stoke, Sheffield and BlackpoolAt the other finish of the level, Pontypridd, Guildford, Cheltenham and Devon all offered yields below 45%, due to higher than standard house prices and static rentsThe reason why student returns are better is because the risk of damage to possessions and non-payment of rent and bills is greater

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