This month thousands of students across the country will have settled into their new student houses. After the initial partying of fresher's week, some parents may get a few phone calls from....
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div>This month thousands of students across the country will have settled into their new student houses. After the initial partying of fresher’s week, some parents may get a few phone calls from their children new to University with a tone of voice far from their optimism and excitement just a few weeks before, when they were leaving to enjoy their first taste of ‘freedom’ living away from home.
Meeting new people from different backgrounds, learning new skills like cooking, washing and finding the best late night delivery establishment is all part of the new experience. I am looking forward to this time with my own children, in time, but I don’t wish this to happen too quickly.
Many parents are now taking a pro-active approach to their children going off to university or the typical custom of students moving into a House of Multiple Occupancy (HMO) in their second year by investing in properties that their children can use whilst studying and renting it out after they leave University. This gives parents the peace of mind that their children are in adequate living conditions and also provides them a profitable investment for the future.
There is always a great demand for good quality student accommodation, so when a child moves out it’s a great opportunity to expand an existing portfolio or make a first time property investment; with a much faster return on investment compared to a traditional buy to let. Why? Because you can achieve a much larger rent for the property as you will be renting out each room rather than renting the property as a whole.
Importantly, students can make ideal tenants, the student housing sector market is very stable due to the fact that students have a steady, assured income through student loans/finance that is given to them quarterly, and most students will also have guarantors. Furthermore, they will tend to stay for at least a year due to educational obligations.
The opportunities to let an HMO are also no longer restricted to students, with fist-time buyers priced out of buying a home; many young professionals are turning to flat and house shares. Young professionals are also a good and safe option, with employment in a professional sector bringing in a steady income and continually growing house prices, many people have to find a house share and may have to stay longer than expected.
With more and more individuals turning to house shares and with house prices on the rise, there are many great reasons to invest. So, parents can gain a great investment opportunity.
The funding of HMO purchases are very common place with Lancashire Mortgage Corporation, the flexibility in the underwriting criteria to review many types of commercial and residential property coupled with excellent serviceability allow for these type of lends to be very secure. Both first and second charges, short and long term funding solutions, available through Lancashire Mortgage Corporation, and even cross charges against multiple properties, make HMO possibilities for parents and investors as endless as a graduating student with a Geoff Hurst!
Like I said, I look forward to these late night calls from my two in years to come asking for an extra sub until next month so they can eat and survive and then I see 10 mins later they’ve checked in on Facebook at the local late night drinking establishment until 3am! I’m sure requests like these are not uncommon over the next few weeks, and if you are the parent receiving that call, I know our kids learning the value of money is a hugely important life skill but the odd £20 isn’t going to harm this lesson and life is all about enjoying it with great memories.
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