If you live with a teenager of a certain age, by now you will probably know if they are off to university in October, and if so, where they are headed.

If you have left it late to find accommodation, it’s unlikely that you’ll have time to buy them a place to live for the first year, although, traditionally, students start off slumming it in noisy, vomit-ridden halls of residence – so that they get the complete student experience, you see.

But should you buy somewhere for them to live in the years after that, a property you can also rent out to their mates? Your progeny might thank you if you do. Living costs, unsurprisingly, are a big undergraduate worry, says Accommodationforstudents.com, an independent student rental website. The average student rent in Britain is £60.58 a week, it says, 4% higher than last year. Your child will have to cough up a lot more if they are studying at St Andrews (£82.56), Cambridge (£84.15), or – gulp – the University of London (£102.33). That’s a lot of bar jobs to cover the annual rent.

The other point about buying somewhere for your student offspring is that house values in university towns have traditionally been copper-bottomed. So, after your little darling has got a first from Cambridge, Exeter or Liverpool, the house in which they partied – sorry, studied – may go on making money.

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• Kids off to uni?

Before you rush off to inspect the nearest property magazine for wherever they are heading to, do research. Make sure you are not buying something that will be in competition with a giant, dedicated student block. Not only do these have close links with university accommodation offices, they tend to be built next to clubs, shops and cinemas frequented by students, who are themselves becoming surprisingly picky. Such blocks tend to offer upmarket features such as broadband, and are increasingly popular in places such as Manchester, which have student “villages”.

“We now have about 200 on our site, and the figure is growing all the time,” says William Berry, director of Accommodationforstudents. com. “They rent out at a similar price to traditional student houses, but have better facilities, including concierge services and improved security. I would say they are a preferred option for students – they always get booked up first.”

Still, let’s not panic; while 31% of Britain’s 3modd students live at home, and 5% in commercial blocks, he says, about 35% end up in traditional shared houses, where the yields, frankly, are rather decent. In some places, they are so decent, you don’t even need a blood relative studying there to have a reason to buy.

Landlord Mortgages, a buy-to-let mortgage broker, has produced a table of annual rental yields for property in university towns. It reveals that if you were to invest in a student house in Durham (average house price £114,588), you could expect an annual rent of £10,447 from that average house, providing an impressive rental yield of 9.12%.

The house needn’t resemble a student drop-in centre, either: this figure is reached with three tenants per house. Nottingham (9.05% yield) and Stoke (7.13%) seem attractive, too. Crewe, with high house prices and static rents, is at the bottom of the table, with yields of just 3.4% – way below the national average, 6.59%.

Speak to real landlords, however, and the picture is less clear-cut. “When it worked, we found it was great,” says Martyn Witt, a logistics manager who, five years ago, paid £100,000 for a six-bedroom house in Nottingham for his student daughter. On paper, this looked great. In reality, it was problematic.

“Last year, we couldn’t fill it at all,” he says. “Student numbers in Nottingham had declined, and there are now a lot of dedicated commercial blocks. Essentially, there was a glut of properties, and it was hard for amateurs like us.

“We were also stung by the amount of regulations brought in for houses of multiple occupancy. It made running the house almost unmanageable. It’s not easy if you are a one-man band. It served its purpose, but we were a bit disappointed with how the demand fell away.”

The house is for sale for £175,000 – so, five years on, what with the void periods and having had a lot of work done, there’s not even much profit looming. His second daughter hopes to attend Portsmouth. Would he do it again? “I doubt it. The private market is tough unless you have industrial quantities of property to let.”

However, David Knight, a professional landlord who has spent 10 years building up a portfolio of 30 student houses in Surbiton and Brighton, has found that if you are able to crack the student market, you can do very nicely. “We rent out to students at Brighton and Kingston universities,” he says. “It works for us because my wife and I do all the work ourselves, and we don’t go through agents.

“In our experience, students are good people to deal with. They are straightforward, as honest as most tenants are, and they pay their rent on time.” Dear fellow landlord, what more could you ask for?

An investment in student accommodation, even if it is for a family member, must be as thoroughly researched as any other buy-to-let purchase. League tables showing comparisons of yields are all very well, but there is nothing quite like doing the rounds yourself, speaking to estate agents and interviewing staff at the university accommodation office. Questions you might ask include: are house prices in the town or city stable? Is the university due to expand, meaning more demand for accommodation, or contract, meaning the reverse? In York, for example, there are plans to expand the size of the university by 50%. Is a glut of giant, purpose-built buildings, which will provide stiff competition, about to come on stream?

Furthermore, where do the students actually live? Do they congregate by the university or in some other district? You’ll never get your house rented if it’s not in a desirable area. By the same token, is a desirable student area somewhere that might appeal to other potential renters?

If you are a parent, you should find out how your little darlings feel about being their mates’ landlord – or your tenant. You might save lots of money, but will that be worth it if the situation leads to family tension?

As an investor, you need to be a great deal more informed than an undergraduate at freshers’ week.

buytolet@sunday-times.co.uk

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