Student properties outperform single lets by up to 40%

A landlord with a small property portfolio approached me last week. He lives on the outskirts of Guildford, in Cumberland Avenue, where he has a few 4 bed houses let to young professionals. He was curious as to whether he could invest in the centre of town and let the properties to students, and therefore increase his rate of return in doing so. If so, he wanted to ask my opinion on which street should he buy his next Buy to Let property.

We studied a number of streets located within the area in which students tend to rent their houses, adjacent to the University of Surrey entrance at the Guildford Park Road end of the campus, and closest to the mainline railway station plus town centre bars and restaurants. These were Denzil Road, Guildford Park Avenue, Lynwood and the slightly more expensive Bray Road. 

We then selected typical student properties in preference to single owner-occupier homes. In most cases these are 3 bed houses built with sufficient space to enable a reception room downstairs to be utilised as a bedroom. Some of the properties in Guildford Park Avenue are townhouses so have room to provide up to two additional bedrooms though the rent tends to be comparatively lower on a room by room basis, due to the area being beside the railway lines and a little rundown.

A typical student townhouse in Guildford Park Avenue

Looking at Guildford Park Avenue townhouses are £330,475 but the average rent is only £1750 per month. The gross yield in Guildford Park Avenue will therefore be lower than in Denzil Road, at around 6.4%. Nevertheless, this is still 25% more than he achieves now in Cumberland Avenue. 






In Denzil Road, the average property price can be a reasonable £375,950 and the average rent is typically, £2,250 per month. In  The yield in Denzil Road is likely to be 7.1%.

Denzil Road achieves 7.1% when houses are let to students

It made me consider two other streets close by, Lynwood and Bray Road. These streets are both a little more expensive but rents are typically the same as in Denzil Road. In Lynwood, the average property price is £415,450 and the average rent is £2,250 pcm. Houses in this road could therefore achieve a yield of 6.5%.

Lynwood attracts students as it is adjacent to the University Campus

The average price of a property in Bray Road is higher at £474,200, with rents of around £2,250 per month. My landlord could therefore expect to achieve a yield of 5.7% per year.

Bray Road is more residential yet still attracts students

It goes to show that the student area within Guildford can be a good area for an investment property, compared with our investor's chosen area, but it is a decision that shouldn't be taken lightly. These are only averages, and while the properties, as stated, are all very similar in size and layout in these respective streets, there will be anomalies.

However the smaller 3 - 4 bed properties in this area of Guildford can achieve yields in the range of 5.7% to 7.1%, which tends to be higher than in most other areas of Guildford town centre. 

If you want to know our thoughts on property investing in the streets around the University of Surrey, or elsewhere in Guildford, then please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk for a chat about where to invest in the local area.