Your real estate investments haven’t given you very impressive results lately; you have invested a lot of money in buy-to-let properties but your returns are getting lower and lower each year. Have you considered investing in student accommodation? Purpose Built Student Housing is one of the best kept secrets in real estate. Savvy investors realised a long time ago that this is one area where they cannot go wrong – while commercial and real estate investments suffer due to market adjustments this is one area that remains strong.
Purpose Built Student Housing is exactly what is sounds like – it is housing that is built for students. The quality of degrees on offer from UK universities has continued to improve which means a higher global demand. Unfortunately many universities do not have the resources to improve dorm housing – many of these students come from far away countries only to find themselves living in overcrowded dorms. Many end up renting living quarters in private residences.
Today, a good number are turning to student accommodation investment – they pay less or the same as they would to live in a dorm but they live in much better spaces. They are able to enjoy more privacy, a peaceful atmosphere to study, nice common areas and more. This has proved to be an attractive investment for the few who look beyond commercial and residential real estate. However, some are reluctant because it is a relatively new niche and they are not sure what it holds for the future. Should you invest in buy-to-let properties or should you go for Student Accommodation Investments? Consider the following:
• The demand for this kind of housing has been rising steadily in the last 15 years. The demand ratio for bed space is about 2.3 – this means that at any one time there are more than 2 students waiting for a bed to be free. You will not find this kind of demand in any other niche in the real estate market. If you choose buy-to-let one of the things you have to deal with is filling vacancies – every time a tenant leaves it takes time to find a new one to take their place.
• Students tend to stay for the duration of their studies which means that turnover is low. If a student signs up at a PBSA residence at the beginning of their course you can expect them to stay for the duration. This not only assures your income, it also allows you to plan.
• You don’t have to worry about managing your investment. Typically, instead of directly buying a unit for student accommodation investors approach an investment company through which they make their purchase. The investment company is charged with all aspects of management of the property. They make sure that it is well maintained, that all students are properly vetted and all vacancies are filled without any delays.
Instead of pressing your luck with buy-to-let investments why not try student accommodation instead? Research shows that it will only continue to grow.