Choose buy-to-let in university towns

Permalink: Choose buy-to-let in university towns
by Kay Murchie

According to statistics from buy-to-let broker Landlord Mortgages, property investors in towns with universities can expect an average rental yield of 6.59%, this figure is more than 1% better than the average rental yield in England of 5.42%.

Durham is delivering the best performance and landlords who rent out properties to students are making better returns than the rest of the buy-to-let market.

However, Landlord Mortgages advise that homework must be done before choosing areas as those who fail to do their research could find their investments don’t deliver.

Buy-to-let investors in student towns buying a 3-bedroom property would find the average home cost £141,000 and delivered an average weekly rent of £60 per student, or £9,290 per annum, according to Landlord Mortgages.

Those opting to buy a property in Durham would benefit from both lower than average house prices and higher than average rent, receiving £67 per week, per student, or £10,500 per annum. A 3-bedroom property is available for £114,600.

In Crewe, which is home to Manchester Metropolitan University, a landlord would need to find £171,000 for a similar property but typically get only £37 per week per student in rent, or £5,806 per annum.

A spokesperson for Landlord Mortgages commented that students can be a profitable group to rent to - providing you choose a good location. Whether you are entering the market as an investor in student property, or as a parent buying accommodation for a child at university, the returns can be significant.