Investing in student properties is among the best business opportunities in the United Kingdom (UK). This is a result of the heightened demand for decent accommodation by college and university students. In addition, the number of students in UK also outweighs the accommodation facilities that they can go for. This presents a good business opportunity that people should explore. For instance, investors can build student accommodation blocks in close proximity to their learning centres. They can also negotiate with school authorities and rent accommodation blocks that many students do not like. They can renovate these rooms to suit the students’ need and then act as proprietors. People can even hire reputable property management companies that will manage the student property for them.
If you’ve been considering delving into the world of real estate investment for a while, you know there are a dozen different ways to get involved. You could flip homes, be a silent partner in a rental property, own and manage an apartment building or even list a spare room on Airbnb.
But there’s another niche market you may not have considered. If you’re located close to a college, tapping into the off-campus student housing market could prove extremely fruitful. In December, commercial real estate services company CBRE reported investors were on course to purchase a total of $4.5 billion in student housing in 2015, according to National Real Estate Investor.
The ever-replenishing tenant base of students surrounding college campuses is alluring to many landlords, who can enjoy the benefits of students rushing to secure limited housing options.
People who invest in student property will reap immense benefits. As compared to motor vehicle and other business types, houses will always appreciate. Thus, those who run such businesses will keep reaping benefits. For instance, the student accommodation sector in the UK appreciates by over 10 percent per annum. This presents a profitable opportunity that people should explore. They should only make sure that they select good locations where they will mint maximum profits. Principally, it is imperative that those who invest in student property go for locations that are a walking distance from the learning institutions. They must also make sure that they offer quality rooms that are comfortable to live in and do their personal studies. This gives them a competitive advantage over other proprietors.
Many investors will have been offered the chance to invest in the suite of high-end student accommodation flats being developed around the country and promising a good, and optically, a guaranteed return.
Whilst the numbers offered by many of these types of investments look good and the prospect of having a regular rental income can be equally appealing, I feel that there is one thing that many of us miss out on… what happens after those initial years of guaranteed rents as offered by many of the people promoting these investments?
People who want to invest in student property can either go for university or college towns. These areas host many students who will need some form of accommodation. This is because colleges are small, and may not fulfil the accommodation requirement of their student population. Moreover, universities and colleges also have the potential to grow. They can introduce new courses that tremendously increase their intake. As a result, many of their students will have to seek other options due to limited accommodation space. Some may choose to live off campus due to stringent rules and regulations that the institution enforces. These students provide a steady supply of tenants that investors can target. Thus, people should invest in a school property that has an ambient learning atmosphere.
Private and institutional investors have been attracted to student property as an asset class due to the relatively high yields on offer, which look set to continue in the foreseeable future. Knight Frank, the high-end estate agent, recorded annual returns of 7.8 per cent in September 2013 and predicts similar returns in 2014.
“Student property is one of the most successful real estate asset classes, thanks to stability of demand for student bedrooms from all over the UK. The market is still structurally undersupplied in all core university cities,” says James Pullan, head of Knight Frank Student Accommodation.