You have saved your deposit, think you have weighed up the pros and cons, and you are ready to move into the student accommodation market – but are you?
Do you know what you are looking for and where? Will you go for a new property or an older one which may require some renovation and improvement? Re you aware that many mortgage companies frown on lending to people who will be using properties for students, especially those in multiple occupation. All important issues which may dent your dreams if you come up against them.
Let’s look at financing, an area where you could come up against your greatest problems. One of the biggest issues facing landlords is that very many mortgage companies will not lend to buyers who are going into the HMO (house of multiple occupancy status). This type of mortgage is required for any house where three or more tenants form two or more households.
In order to maximise income most landlords intend to let to three or more tenants. According to statistics there may currently be less than 10 lenders who will consider such a deal (Property Hawk UK). Some lenders will even insist that a potential buyer already has some buy to let experience before being considered. So if you are a novice in this field you may not succeed.
Seek expert advice, do your research and it may be that by gaining letting experience in a single occupancy house or flat you make yourself more attractive to a lender when you decide to move on. It may minimise your income in the first place but it shows your determination and will increase chances of boosting income in the future.
Choosing your area is equally important. Some university towns, such as Leeds, are top heavy with student accommodation. Widen your net, talk to university offices and local developers, talk to students in the area and you will benefit from all their knowledge for the future.
