Generally speaking, people associate student housing with congested dorms, parties, empty beer cans, and loud music. However, let’s not forget that we don’t live in a movie. In real life, things are a little bit different.
Some parents are not willing to pay rent for about 5 years to keep the kids in school; they would rather invest in property altogether and buy their teen a flat. Others, on the other hand, can’t afford rent at all; as a consequence, they encourage their kids to live in dorm. After the second year of study – after the student has accommodated with student life – he/she can choose to move out with friends, get a part-time job, and split the costs of a rental property.
All things considered, there’s no doubt that investors have a lot to win. Experts recommend them to get a good look a student housing. The sector is booming because there’s an increased demand. High-end student housing is a brand new form of investment that seems a lot more convenient than dorms because the student has privacy and an increased level of comfort.
Student property – a form of investment with great potential
Both institutional and private investors have gotten extremely attached to student housing as a type of asset class because of the high yields they provide. In the past 5 years, this form of investment has proven to be extremely profitable because increasingly more students crave for stability. Since universities don’t have enough rooms for their students in dorms, the best cities to invest in student housing are those with lots of colleges and universities.
Despite increased tuition fees, teens are not giving up on going to college, and many are willing to get a job to cover costs and live on their own in a rental. This is excellent news for investors searching to diversify their portfolio. Why is student accommodation profitable? That’s a key fundamental question they all want to get an answer to before spending any money.
The number of students eager to get an education and go to college has increased tremendously. Even though many can’t afford the fees involved, they’re not giving up; and we have to mention here foreign students as well. Studying abroad is no longer a trend, but a need for someone coming from an underdeveloped country to get internationally certified.
An increasing demand for student accommodation
Many universities can’t cope with the demand for student housing. Even though they can accommodate them in class, not all can provide students with accommodation. Therefore, investors have realized that a whole new property branch has opened up for them – student property. What’s even better is that a student’s priorities have changed. They need that sense of freedom, and they would rather live in a rental with 2 more friends, than in a dorm where they don’t get along with their roommates.
Back in 2008, when the recession kicked in, many types of investment failed. Student housing, however, has survived due to the increased demand of students to live in rentals. Some didn’t have any other choice and they had to do it because spots at their university or college campus were fully booked. The future looks extremely promising for this property sector; we live in a world where people can’t get well-paid jobs if they don’t have a degree. This has compelled many teens to do whatever’s possible to apply for college.
That being said, it’s no wonder that student property has managed to stay afloat. As opposite to traditional buy-to-let properties, investors have realized that there’s more potential in student accommodation. Most teens need 4 to 6 years to complete their studies; this means that they might live in your property throughout this period, but to do so it’s the investor’s job to make sure their stay is comfortable and stress-free.
Performing regular checks on the properties, making sure everything functions, and understanding their needs and wants is key. Otherwise you risk losing them after one year. One last piece of advice – before investing in student accommodation, test your properties. See how many people are interested by posting ads, and make sure the location is close to main universities and campuses in the area.
March 29, 2017