Do student property investments work in smaller towns?

Alison Wallace Hill Street

Student HMOs beyond the big cities

By Angharad Owen, Co-editor

People who invest in student property often focus on the well-known university cities — Oxford, Cambridge, Manchester, Bristol, etc. But there’s a whole load of universities that are being forgotten: the campus-based universities. These are usually outside smaller towns and cities, or even in the middle of the countryside.

Alison WallaceHaving spent her career working in the property industry, Alison Wallace decided to start investing in student HMOs in the lesser-known Newcastle-under-Lyme, home of Keele University, to supplement her income.

With years of experience in property marketing, she was able to apply many of her acquired skills to her investing. She had particularly enjoyed designing and staging properties for marketing, especially in the luxury student rooms sector, so it felt like a natural progression to focus on the student property investment strategy.

There is a good demand for student HMOs in Newcastle-under-Lyme, as Keele University attracts a lot of international students and is renowned for its science and research programmes. There is also a large teaching hospital in the town, which provides an alternative exit for her property investments if necessary.

Despite the demand in the town there is, however, increasing competition, resulting in house prices steadily rising and the supply of properties slowing down.

It is relatively simple but not always easy to be successful, as you need to have a great product in the right part of town at the right price, and in Newcastle-under-Lyme, there is definitely a ceiling price for rent. Alison also likes to offer a variety of rooms, some with en-suites and others without. However, she insists that communal areas must be of a high standard, so all her properties have big lounges and big kitchens.

Managing student HMOs during the pandemic

Coronavirus had a well-publicised negative impact on universities and student life, and Alison worked very hard to keep her tenants happy during 2020. She found that the biggest problem was not being able to see who was still present in which house to fully understand what was happening. For any tenants who moved out, she deducted the utilities portion of the rent, and for those who wanted to terminate their contract, she offered a 20% discount for tenants who paid in full.

Although many of the university’s courses have been online this past academic year, Alison has found that tenants wanted to go back because they missed their friends and still wanted the experience of living away from home.

Moving forward, she hopes to continue what she’s doing. She is on track to reach her investment goal, and the net cashflow from each property has superseded her expectations.

Alison Wallace Florence Street

Alison’s advice for others considering student property investments

  • It’s all about considering the marketing mix
  • Price is key
  • Remember, students still want to live their lives!

Subscribe to YPN magazine to read the full story in the August 2021 issue, with detailed case studies.

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