Benefits of Student Property as an Investment

Benefits of Student Property as an Investment

Property investment stands as one of the most lucrative asset classes. It is the only one that has the potential of securing two different types of return; capital appreciation and rental yields.

Take an investment yield for example. Today it is increasingly difficult to find investment assets that produce a substantial and steady income. Placing money in the bank can quite often present little value increases and the dividend yield on the Financial Times Stock Exchange is currently around a measly 3.66%. Investment property yields can be much higher, and in certain UK hotspots yields can be found as high as 12%, particularly across regions within the Northern Powerhouse.

• Student numbers are reaching new heights

Despite increasing tuition fees and uncertainty surrounding the EU referendum result, there are a growing number of young people embarking on further education, going up by 1% to 408,000 by the end of 2016. This highlights the highest number on record and represents the second successive year in which numbers have exceeded those who entered before the introduction of the spike in tuition fees in 2011/12.

Students are creating a huge pool of demand as they all require suitable student housing.

• Universities fail to meet the demand of accommodation

Traditionally, students would live in halls of residence but with soaring demands, there has been a dramatic shift in student housing as there are simply not enough rooms left available to the masses on campus. Purpose built student accommodation is an emerging trend as the growth in student numbers has far exceeded the corresponding growth within university accommodation. Therefore, it is becoming harder for traditional institutes to provide accommodation beyond just the first year of study.

• Student accommodation is recession proof

Unlike the larger rental market, which is subject to economic swings, there will always be a demand for higher education. In fact, quite often the opposite is true. When jobs are fewer, those leaving school are more likely to consider a degree to secure a higher standard of job role.

• Purpose built student accommodation is attractive  

Purpose built student accommodation (PBSA) provides all the same benefits as living in halls of residence. Today’s students are shunning traditional house shares and out of date halls as they are now perceived below par, with PBSA gaining popularity from a more discerning student population. PBSA is perfectly designed to meet the rising standards of today’s living quarters, with many offering rooftop gardens, cinemas, onsite coffee shops and gym facilities. Positioned in central locations incorporating all-inclusive rents, PBSA stands as an attractive option for students from the UK and overseas.

• Students could become long term tenants

One degree normally takes around three years. If you keep students happy they could be your tenant for the duration. Between two and six years could lead to tenant consistency which is what most tenants lack as well as keeping void periods to a minimum. RW Invest, the property investment experts, specialise in both student and residential buy to let across numerous UK hotspots.

Guest Article.