Property investment: Buy to let VS student accommodation
Putting your savings into real investment is always an important decision. Today, the low rate of return provided by the banks has led investors to increase the amount they invest in properties. England, and especially London, is known to be one of the world best "safe havens" for property investment.
Buy-to-let and student accommodations are two popular property purchases, but they offer different characteristics.
The buy-to-let (BTL) is the traditional way to achieve growth and income. The London property market shows an amazing increase in property prices up of to 30%/year in Mayfair. The central areas and most of the surrounding boroughs are forecasted to see their prices rise for the next years. Within the next 8 years, it will become difficult to find anything under £13,000/m2 in zone 2. This is excellent news for opportunities of high capital gains.
The other good news for investors is the housing shortage which continuously puts rental prices up. In central London and its close suburbs, finding tenants is usually easy. Most of the properties are let within days. From shared accommodations to single family tenants the demand is huge.
However, BTL investment in sought-after locations requires a good deposit if you wish to have a mortgage or solid cash funds. Furthermore, refurbishment and decoration costs must be planned in advance and how you will deal with the day-to-day letting management.
Buying a student accommodation is often a choice made by individuals who want to receive monthly incomes from their savings.
Student accommodation in Bristol starting price £78, 299, 7% yield guaranteed for 5 years.
The UK is known for being a popular destination for international students. Cities like London, Manchester and Liverpool are known to be university cities attracting many international students. The offer of high standard student accommodation is significantly growing, while the actual offer of accommodation is far below the demand.
The best developers guarantee the minimum net income yield (7% to 9%) for a few years, as well as capital growth (around 4%/year). The buyer does not need to worry about finding tenants or day-to-day management of the property; it is a hassle-free investment.
The success of student accommodation is mainly due to the high income yields and the low amount needed to invest. People choosing to put their funds into such assets are attracted by cash-flow security. However, it is not an investment that generates high capital gains like Buy-To-Lets.
For any information about property investment please do not hesitate to contact KRYSTEL ANN PROPERTIES team; we will be glad to be part of your project.
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