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cashinmattress

Renting To Students Most Profitable

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Renting to students most profitable

Students and young singles generate the highest yields for buy-to

landlords.

According to research carried out by buy-to-let mortgage specialist lender Paragon student tenants generate an average yield of 6.45%, whilst young singles generate 6.22%.

Retired people are also high up the table (6.16%), followed by white collar/professional workers and executive or company lets (both 6.13%).

At the other end of the scale, non-housing allowance benefit claimants generate the lowest yields at 5.78%, followed by young couples and manual workers (5.94%).

The average yield across the market currently stands at 6.2%.

Nigel Terrington, Paragon Group Chief Executive, says:

“Yields are an important component of a landlord’s overall business plan because they give a good indication of the income that the property generates.

"Of course, returns for many landlords will often be higher than stated yields as these are calculated at the current rental income against the property’s value today, not taking into account capital appreciation since the landlord purchased the property or their loan-to-value.”

Terrington adds: “Student yields typically outperform the wider market because they are let on a per room basis, which can generate higher rental income. On the downside, they tend to require a higher degree of maintenance, so landlords have to factor that cost into their overall business models.”

And:

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A growing number of English universities plan to charge £9,000 per year – the maximum possible. This has raised fears that the government will have to claw back funds from universities – possibly by reducing the number of places on degree courses – if the majority of institutions charge the maximum. It was revealed last month that all 123 universities and university colleges in England have planned on charging £6000 or more.

The contradictory nature of the market versus the propaganda is staggering.

People will still be sucked in of course.

Crap economy, huge tuition and living costs, yet slumlording to students looks to be a good bet? Ha.

Where and when did we lose our way?

Edited by cashinmattress

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I wonder what the net yield of a student let is after repairing a place once they've trashed it?

Article also fails to mention many universities have been building their own accommodation over the last few years as they want to increase their income.

As you say CIM, university fees are likely to restrict demand - not only fewer students but many more staying at home with their parents.

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I wonder what the net yield of a student let is after repairing a place once they've trashed it?

Article also fails to mention many universities have been building their own accommodation over the last few years as they want to increase their income.

As you say CIM, university fees are likely to restrict demand - not only fewer students but many more staying at home with their parents.

I suspect the voids are horrendous too

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Would have presumed the aggravation and cost of student lets would be worth more than 0.25% over the average. Press release wise this outfit is on a win/win, house prices go up and look how clever you were to buy, prices go down and look how much your yield has gone up.

Personally looking forward to this outfit going out of business....

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  • 298 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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