Over the last decade the UK’s higher education sector has grown substantially, partly thanks to a huge influx of international students who are all seeking the very best learning opportunities the world has to offer.
Today’s ambitious overseas students, along with their domestic counterparts, are ready to splash their cash on state-of-the-art accommodation. This provides incentives for savvy property investors who have a strong grasp of the student property sector.
Through thoughtful planning, sound financial and legal protection, and effective interior design, investors can create robust long-term investment opportunities that provide reliable yields.
There are three main routes to pursue that if managed properly, could provide you with a substantial income – up to 7 per cent and beyond – in a ballooning global market worth over £200bn.
Here are the main considerations for student property investors.
What type of investment do you want?
How much money and time you have will massively influence the investment you make.
Here’s what you need to know.
Investing in housing developers
Student properties tend to suffer more wear and tear than other types of property, due to the lifestyle and habits of their occupants – and especially if there are high numbers of residents all sharing the same living space.
This is where developers such as Select Housing Group step in. They develop and manage properties on behalf of investors who are attracted by the less hands-on approach to their venture.
Instead of being called out themselves for issues such as boiler repairs or having to be on hand for house viewings, investors can leave it to the professionals, whilst still reaping the financial rewards of their venture.
Buying your own student property
Buying a property and letting it out to students is the most hands on investment type because you’ll be dealing with individual rent, damages, liability and other important nuances such as personal guarantees.
Location is very important here. Look for universities that successfully recruit non-EU students as a bid to boost their global reputation. They’re the ones you can expect to have a steady stream of high-spending students who are all looking for the very best student accomodation.
If you do buy your own property with a plan to let it out, you need to be fully prepared for the new breed of student that expects much more than the student of old, with modern amenities and thoughtful design at the forefront of living space, design that can even prevent international students becoming homesick.
For some idea of your competition, take a look at our post that explores the world’s best student accommodation.
Investing in housing funds
Student accommodation real estate investment trusts such as GCP Student Living are focused on longer term returns on student residential accommodation.
This option is ideal if you don’t have the funds to invest in your own property directly, but you already have experience in stocks and shares and see the student market as a route towards gaining stable income.
GCP is just one fund that understands and promotes to investors that the student accommodation market is worth £59 million to the UK economy annually. They make it clear to potential investors that student accommodation rents have outperformed other UK property classes RPI (Retail Price Index) for the last fifteen years.
The final point at least, is reason enough for you to seriously consider this investment type, whether it’s with GCP or another similar fund management institution.
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