Newly refurbished 8 bed student lettings in Leeds

Newly refurbished student lettings in Leeds

Finding student accommodation in Leeds

Finding student accommodation in Leeds

Student accommodation in Leeds - 16 Providence Avenue

Finding student accommodation in Leeds

Great opportunity for 10% return in the auction!

http://www.rightmove.co.uk/property-for-sale/property-58767844.html

This property on Lucas Street in Woodhouse is a great opportunity for anyone looking for 'a project' and to add immediate value to a property.

It's currently a 4 bed vacant student property, but has easy potential for my favourite way of adding value - convert the basement to add an extra 2 bedrooms.  It's on for a guide price of £145,000 in the auction, and the sale method is by 'modern method of auction' which basically means you've got 28 days in which to arrange your finance and exchange contracts, as opposed to the traditional method where you've got 28 days to complete.

Once refurbished, then as long as it's to a high standard, you should be able to get £85 per person per week, or £26,520 per annum - we manage to achieve this on many of our Woodhouse properties now as the area becomes increasingly more popular to students.  With a potential refurb cost of around £60,000, then as long as you can secure a purchase under £200,000 then you're looking at over 10% yield on your investment.  In the current Leeds student market where 8% yield is becoming the norm when purchasing, I'm sure you'll agree that's a sound investment.

Another chance to add bedrooms and get a 10% yield in Woodhouse!

http://www.rightmove.co.uk/property-for-sale/property-58420552.html

This 4 bed property on the market with Castlehill, is another re-development opportunity in the increasingly popular Woodhouse area of student Leeds.

When I first started in student accommodation 7 years ago, Woodhouse didn't have the best of reputations.  But as many of the outlying halls of residence have been shut down over recent years, to be replaced with city centre or on campus halls, students are increasingly looking at Woodhouse as the place to spend their second and third years.  Having spent their first year being close to Uni, and the bars and clubs of Leeds, many of them are looking for second and third year accommodation as close in as possible, and Woodhouse obviously ticks that very important box.

And as landlords are being forced to look for bargains elsewhere as 7% to 8% yields are becoming the norm in Hyde Park and central Headingley, more and more properties are being snapped up around the University and in Woodhouse for cheaper prices than they would be able to find in the more traditionally popular areas.  Many of these properties are then being refurbished to a very high standard and rents of between £85 and £100 per person per week are becoming commonplace.  This gives the opportunity for some fantastic yields.

We manage a few properties on Delph Mount and the adjacent Cliff Mount, and they lend themselves very well to being 6 bed properties.  In this particular house, the cellar has already been dug out and converted to living accommodation, so would easily be transformed into two bedrooms and a bathroom.  

The layout of the rest of the house is fine, with the only addition required for a Jack and Jill bathroom on the top floor.  It needs a complete refurb - new everything, strip the walls and re-plaster throughout etc, but that should be achievable for around £60,000. 

All the bedroom sizes would be great, and if the refurb was done to the right standard I'd be confident of getting £89 per person per week, or an annual rent of £27,768.  So if you were to pay the asking price you'd be looking at a very healthy yield of around 10%.  

A poor student investment!

http://www.rightmove.co.uk/property-for-sale/property-52715185.html

As regular readers to the Leeds Student Property Blog will know, I try and pick the best opportunities that come to the market and suggest ways in which an investor can maximise yields, often by adding rooms or refurbishing to a high standard.

This month, I've come up with something slightly different - a property that you should not invest in.

I'm often approached by landlords who've bought a student house in Leeds and are looking for an agent to manage it for them.  On many occasions, they've unfortunately bought the wrong house or in the wrong area (or even worse, both).

This for me is a classic example.  It's advertised as a being let to three people, with the potential to let it to four.  The advert goes onto describe it as having four double bedrooms.  It's on for £189,500 with Purplebricks.

Now, Hessle Road is a great location - very sought after by students due to its proximity to Brudenell Road, the Hyde Park Picture House, Sainsburys and the 15 minute walk into University.  But these houses are two bed properties, which on this occasion someone has shoe horned four bedrooms into.

If it were my house, I'd make both bedrooms en-suite and remove the bathroom on the ground floor making the living area bigger.  If done at a high spec, you'd probably get £100 per room per week, so £10,400 per annum.  So at the asking price that'd be a 5.5% return, which for the general residential market isn't bad - but as student landlords, we're looking for double digit yield. Right?

Safe, ready made investment near Leeds Uni

http://www.rightmove.co.uk/property-for-sale/property-40162896.html

This apartment in Kelso Heights is on the market with Manning Stainton for £118,999.  We manage three apartments in the block, and because of their proximity to Leeds Uni and the Business School they let very easily each year for £72 per person per week.

It's currently a 2 bed, but it could be quite easily converted to a 3 bed by turning the living room into the third bedroom, and converting the kitchen into a kitchen living area.  It's a little tight, but one of the apartments we manage has this exact layout and we let it each year without any problem to a group of three for £72 pppw or £11,232.

One slight word of caution.  My understanding of the block is that the apartments are not mortgageable - something to do with the structure of the building, so if you need mortgage funding then make sure you ask that question first!

So, whilst not my usual 'refurb to a high standard' property suggestions, it's a very safe investment for those who perhaps don't have the funds available for the bigger student houses that involve the accompanying £50,000+ refurbs to get the yields up over the magic 10% mark.

A safe bet on the Headingley/Hyde Park border.

http://www.rightmove.co.uk/property-for-sale/property-53055622.html

This 7 bed house on Richmond Avenue on the Headingley/Hyde Park border has been refurbished to a very high standard.  The location is good - it's on the edge of Hyde Park, so around 20-25 minutes walk to both Uni's, but is also handily placed for any students from Leeds Becketts based up at the Headingley Campus.  We do get groups with some based at Headingley and the rest based at the city campus, so this would be perfect for them.

I've been round the house with one of our landlords who was interested in buying it, and as I said earlier it has been done up to a high standard.  It's currently let at £94.50 per person per week including the bills which to be honest I think is a little low.  On the basis that we charge £15pppw for our bills inclusive package, the rent on this is around £80pppw, or £29,120 per annum which is too cheap.  I would be confident of getting £89pppw or £32,396 per annum.  If you were to pay full asking price, which at the moment is the absolute minimum you will pay, then that's a return of 8.75%.

For central Headingley and Hyde Park this seems about the norm at the moment.  Whether this will change after the new stamp duty rates come in, who knows?  The student property market in Leeds is on fire just now, and whilst I'm sure that the impending stamp duty increases are playing a big part in that, it was very strong before George Osbourne's autumn statement, so I don't see it dying a death come April 1st.

8.75% is an attractive return, particularly for those used to returns from single lets, or the rental returns from the South.  So it's a great house in a good location offering a good return, and I'd be happy for one of our landlords to buy it so that I could manage it because it would rent very easily each year.  However, from my previous posts you'll know that I prefer to add value where possible, and when that happens, you should be looking for returns in excess of 10% every time.  Last summer we refurbished around 15 properties for our landlords, and each one is now enjoying double digit return on investment.  So whilst it's a bit more hassle (mainly for us, not you!), I'd always recommend that route.

Another cracker in Woodhouse!

This property on Lucas Street in Woodhouse has just come to the market with Mannings for £170,000.

It's currently let as a 5 bed until this summer, but I think there's potential for a conversion to a 6 bed over the summer, with a September start for next year's tenants.

Woodhouse, as I've said previously in this blog, is becoming more popular as the trend is definately for students to live as close to the centre of Leeds as possible, where they not only go to Uni but also socialise nowadays.  This combined with a crack down by the police to reduce crime has made the area more popular than ever.  And for the students it still represents value for money as rents, whilst creeping up, are still 10% cheaper than central Headingley or Hyde Park.

Anyway back to the house on Lucas Street.  You'll need to put another bedroom in the basement, get rid of the separate bathroom and install a Jack and Jill bathroom between the two bedrooms.  The kitchen is a bit pokey at the moment, so I would convert that into a utility room and turn the dining room into the main kitchen.

On the first floor, you'll need to pinch a bit of the bathroom back into the single room which shouldn't be a problem as it's quite big.  On the top floor, you can either leave as is, or install another Jack and Jill to make three bathrooms in total.

The house is generally in pretty good condition so a quick redecorate throughout, and replace the carpets and I think that's all it needs.  Shouldn't cost above £25,000 for the lot, so with costs of purchase, lets say £200,000 all in.  You should get a minimum of £79 per person per week, so that's £24,648 per annum and a cracking 12% yield!

But remember, you've a little under 6 weeks to try and complete before the dreaded stamp duty rise at the beginning of April, but even with the extra £5,400 if you miss it, it's still a fantastic investment.

Potential 13% ROI in Woodhouse

http://www.rightmove.co.uk/property-for-sale/property-52334899.html

This 5 bed on Burchett Terrace in Woodhouse is on the market for £160,000, and is currently empty.  It has fantastic potential for developing into a good quality 6 bed, which if done to a high enough standard would rent for around £79pppw, or £24,648 per annum.

The basement is already converted so just needs some alterations to convert it into two decent sized bedrooms with Jack and Jill bathroom.  The rest of the house really doesn't need any structural change, just a complete refurb with a new kitchen and bathroom, get rid of the dreaded wood chip wall paper and replaster where necessary, LED lights in the communal areas, re-decorate throughout and new carpets and furniture. 

I reckon you could easily do all this for £25,000, so if you paid asking (which is becoming more of a challenge lately!) then with a total outlay of £185,000 that's a fantastic return of over 13%.

Why is the student market in Leeds so strong?

 

1hr and 59mins is the time it takes from Leeds Train Station to London Kings Cross.  Roll the clock back 20 years, and to the London investor Leeds was just another provincial city, north of Watford Gap and a place where nobody visited let alone invested. However, since the turn of the Millennium, property investors from the South have slowly but surely cast their eyes beyond the M25 and identified new parts of the UK where they can get yields that are over twice, if not three times higher than that can be achieved in London. 

Coupled with competition from local landlords, the result over the last few years has been an increasingly buoyant student property market in Leeds, particularly in the last six months and particularly in the prime locations of central Headingley and Hyde Park as demand has outstripped supply.  It has not been unusual in the last few months for properties in these areas to be sold within days of coming on the market for amounts at or above asking price.

This may seem surprising in view of the new Tory government’s unexpected attack on the private landlord and the general Buy to Let sector.  You would have expected the reduction of tax relief on mortgage interest for higher rate income tax payers, coupled with the abolition of the annual 10% wear and tear allowance and higher rates of stamp duty for BTL properties would have dampening demand, but evidence on the ground would suggest quite the contrary with the student property market in Leeds now stronger than ever.  The obvious question is why?

Well, when looking for the best city for your student Buy to Let, it is important to look at two things ... total student numbers and what proportion of students are in the private rented sector.  Leeds scores well on both counts, it is third only to London and Manchester in terms of total numbers and ranks fourth behind Glasgow, Brighton and Southampton in terms of the proportion of students renting in the private rented sector.

 

In real numbers that’s just over 60,000 students in total with around 55% living in the private rental sector, with 30% in halls and 15% living at home.  As such, the city has a healthy target market for those wanting to become student landlords or grow their portfolio.

If you couple this with the fact that Leeds is one of the few remaining university cities in the UK which still enjoys a 52 week rental year, and that even with prices increasing at their current rate you can still expect between 9 and 10% return on your investment, then we have a very strong argument for investment in the student market in the city.

And whilst Leeds hasn’t seen the levels of capital growth witnessed in London and the South East, across the general market property values in Leeds have risen by 122% since January 2000.  I would suggest that in the student market values have risen by more as they not only mirror the general market, but are also closely linked to rents which in broad terms have increased by 2-3% per annum.  This coupled with the somewhat frenzied activity in the market since the summer as demand seems to be completely outstripping the available supply, would suggest that capital growth remains strong.

To go slightly off tangent, it is important to recognise the impact of international students on Leeds.  One of the main themes of the General Election was for tighter migration targets. Of the 58,000 students in Leeds, 6,000 of them are international students.  This is important, as approximately just over a third of migrants who come to the UK do so for formal study and it is essential that we recognise the important role they play in university funding and the demand for student properties.

Having said all of the above, landlords new to the market must realise that they can’t just buy ‘any old property’ in Headingley or Hyde Park and expect it to be the answer to their buy to let dreams.  It is important to buy in the right area, obviously at the right price, maintain the property to a high spec, and perhaps most importantly not get greedy by over populating the property.  After all there is still a surplus of student houses in Leeds, so if you don’t follow these principals then you may be left with an empty student house or apartment come next October.

Many landlords, some who use us to manage their properties, or who manage their own properties, and even landlords who use other agents often email me or pick up the phone for thoughts and opinions on what (or as importantly, what not) to buy.  At Springwell we don’t sell houses, so can give impartial and thoughtful advice and opinion, even if sometimes it might not be what you want to hear.


Feel free to give me a call but in the meantime, if you’re interested in my ongoing thoughts on the market, keep visiting the blog to see what properties I think make a good investment.