Over the years, investment in buy-to-let property has always been viewed as a good investment. Buy when the market is low, rent out to tenants for a few years at a healthy rental yield and sell when the market is high. Easy right? Well not always, but Residential Estates are here to help guide you and maximise your income. Trends have changed in recent years and there has been a boom in the construction of student-specific housing in every town and city across the country with a college or university. The focus has therefore switched to investing in student accommodation, but is student accommodation a good investment?
The Rise in Student Accommodation
Property investment is never a completely straightforward road to success as there are many different factors to take into consideration with every type of property. We believe however that the time is right to invest in student accommodation in 2019.
Let us begin by looking at the pure numbers. According to the Higher Education Statistics Agency there are now over 2.3 million students at universities in the UK, and the country has become a more appealing place for foreign students in recent years. All of these students need somewhere to live and if you think back just a decade ago, the quality of student-specific accommodation was sorely lacking. The rise in Purpose Built Student Accommodation (PBSA) in recent years has meant that it is now an attractive sector for property investors to consider.
The Benefits of Student Accommodation Investments
How can you expect to benefit from investing in student property when comparing it with traditional buy-to-let property investments?
One of the first things to consider is that the risk attached to student accommodation investments is diversified as it is most likely that the property will be subdivided into multiple rooms and occupants. As a physical asset, this makes financial sense when anticipating potential risk due to the fact you are not relying on one sole occupant as you may be in most traditional buy-to-let properties. If one student is failing to keep up with the rent, you are not left with an entire missing payment against the property as the other students will in the vast majority of cases be paying.
You are also less likely to have to plan for long periods of time where the student property is vacant. Most students will sign up for the academic year, as well as wanting the option to stay living in student accommodation during the summer sometimes.
In our opinion, if you are investing in student accommodation it is worth investing in a company with a range of student properties on its portfolio or a management company. This ensures that you do not have to worry about fielding multiple calls if there are any problems with the apartments, broken down boilers and other repair issues.
Purpose Built Student Accommodation or Developed Student Property?
PBSA has seen a significant increase in investment in recent years, but for others, developed student property is still an option. Both have pros and cons. A PBSA is built with one purpose in mind, to accommodate students which means they are purpose-built to appeal to the target market.
For those areas where students go home for the summer, certain types of accommodation are in prime locations to make additional income as summer city break lets, maximising your income further. If there is a downturn in demand for student accommodation in the future, there is a good chance of this type of property being sold back to the market to be used for many different purposes and with a good chance of a profit due to the renovations that have been made.
As with any type of property investment, many of the choices that you make will come down to personal choice, the location of the investment, and the numbers of students looking for accommodation.
In summary, Residential Estates are very confident that there is still a great demand for student accommodation in the UK, especially from the overseas student market where there is a good chance to accrue higher rental yields. We therefore believe student accommodation investments are an excellent opportunity if you partner with the correct providers.
At Residential Estates we have an experienced team that understands the student property market fully and we can put together a plan of action that helps you find the perfect student property investment opportunities to meet your needs. For more information please contact us on 01244 343 355 or firstname.lastname@example.org.