Should I buy a student property in Exeter?

I have many, many…many potential landlords contacting me at the moment to enquire about buying student property.  I imagine people hear of the high annual income that can be achieved and want to dive straight in, however in the majority of cases I find they have not carried out enough research into the Exeter student market.

It is worth considering what may happen if there is another quiet year and the property is not let or if additional licencing comes into place preventing the ability to renew HMO licences in certain parts of the city.  Although there is no sign of this any time soon, it is worth having a contingency plan, just in case.  It is true that in the majority of cases there are excellent annual returns to be made, this year we found all our properties let extremely quickly and demand considerably outstripped supply, meaning landlords were also able to select the best tenants for their properties.

I have sold a many student properties over the last few years and on average they have been achieving a gross annual yield of around 6.9%, which is generally considerably higher than most other residential lets.  This sounds good, however it is worth factoring in the potential expenditures, such as replacing furniture, redecorating and dealing with tenancy matters.  With changes to tax allowances coming into place and the abolition of the 10% furnished property allowance, it is worth talking to a financial adviser to look at your personal circumstances.

Students nowadays look for properties that are well maintained, clean and tidy.  They ask questions about the landlord and if the property is managed by an agent or the landlord, they are also knowledgeable about the requirements for Energy Performance Certificates, fire detection systems and licences.  In other words, if a property has been neglected, the likelihood is that it will not be let.

If you are looking for information on the requirements for an HMO licence, please follow this link to Exeter City Councils’ website: http://www.exeter.gov.uk/index.aspx?articleid=11223.

Generally, student properties do make good investments, in the current market.  If you are looking at buying a student property, please call me to discuss the ones we currently have for sale and I am always happy to provide advice to existing landlords.

Regards, Jon.