At RW Invest we specialise in student accommodation investment, but sometimes investors are reluctant to consider student accommodation over more traditional buy to let options. So let’s address some of the key points
At RW Invest we specialise in student accommodation investments and sometimes find investors are reluctant to consider student accommodation over more traditional buy to lets. While traditional buy to let is an excellent way for investors to earn profits, student accommodation can be equally as lucrative. In this article, we will take you through some of the concerns we hear, and tell you why you should really be considering student accommodation investments.
“With such a specialised property type, my options for resale will be limited”
While student accommodation investments can only be sold to other investors, this does not necessarily mean that you won’t be able to sell. The number of students is increasing year on year, and so there is a rising demand for student accommodation; this means that it becomes more and more attractive to investors who are looking to make a profit.
A good management company can make or break your chances of a resale. Here at RW Invest we ensure the student accommodation we sell have strong, established management companies who are expert in their field. This means that students living in the property are happy, and tenants are continually sourced. If demand grows then so does the value of the property, so resale to an investor is made a lot easier!
“With only one type of tenant, there could be a lot of time where the property is empty”
There is only one type of tenant, but these tenants are on waiting lists for fully tenanted accommodation. The numbers of students are growing year on year and university-owned accommodation cannot stand up to the demand. Currently, 70% of students look to private accommodation rather than university owned.
Location is key for students, with the majority relying on public transport or foot to get around. They want convenience and to be close to the city, which is what our student accommodation investments provide.
This all means that student accommodation investments benefit from low void periods and are often tenanted before the next term starts. As mentioned earlier, the management company are definitely a factor in this, as if they manage a property well, students will be attracted to live in the complex.
“I want my property to increase in value, student accommodation won’t do this”
This is, in fact, incorrect, your student property has every chance to increase in value. At RW Invest all of our properties come fully managed by experienced companies, who know how to run student properties and who can attract tenants for you. The more popular the accommodation becomes, the higher the weekly rent could be.
With higher weekly rent, your property increases in value and therefore you earn more profit. Plus if you want to sell after a few years you can usually resell through the company you bought from and use their access to investors to get the most back from your investment. Student accommodations are perfectly suited to investors who would like to make consistent annual earnings, with One Islington Plaza offering investors £5,039 annual income assured for three years.
“Buying these types of property off plan sounds like too much risk, what if the developer isn’t experienced enough to complete”
Everyone has heard news about developers going into administration and investors being left in the lurch. To try and combat this, RW Invest only works with developers we have fully vetted. We undertake due diligence on each developer we work with and only sell their development if they pass our checks.
It is important for developers to possess a strong and proven track record. You should check on their previous developments and take a look at the types of property and whether they are popular with tenants. Particularly with student accommodation investments, if a developer has completed this type of development before, this could be reassuring when making a decision.
Still have questions about student accommodation investments?
We know when investing your money, you want to get the best returns possible. While we think buy to let investments are a great addition to your portfolio, we are also confident that student accommodation could provide you with high returns too. We are experts in this type of investment and would be happy to talk you through any questions you may have about investing.