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Is Student Property a Good Investment?
Student Property – A Smarter Investment
A student property offers buy-to-let investors a low entry price of between £50,000 – £70,000 while providing high rental yields between 7 – 10%. What makes student accommodation such a good investment against traditional buy-to-let properties is that the property price is directly linked to the rental income that it generates. Due to the historical and continued increase in student accommodation rent prices, student property is now considered one of the strongest performing asset classes in the UK, making it essential to any portfolio.
The two most popular forms of student property investment are:
Purpose-Built Student Accommodation (PBSA)
Houses in Multiple Occupancy (HMO)
Both of these student properties can create potentially huge return rates as the demand for student housing continues to rise every year. In the academic year 2017/18, there were over 2.3 million undergraduate students in the UK, with over 200,000 students being from overseas. Between 2008 and 2018, this number has increased by around 12% with numbers predicted to soar in the coming years. Many of these university students live away from home during their three years of education. It’s estimated that 43% of students live away from home for university. Essentially, this means that as a student property investor, you have a large market. Plus, the PBSA market is in high demand and is still a relatively untapped market with the potential for bigger growth.
The rising undergraduate student numbers and the need for housing mean that any investor can have success. In the UK, specifically, the demand for student housing is always increasing. Despite higher tuition fees, it is still essential to many people. The ever-present issue of low availability of student housing means that any investor looking at student property will find it easy to find a tenant willing to move into their investment. Besides, rental prices are typically higher than residential properties as bills are sometimes included in rent; this is especially true for PBSA properties. Even during the last global economic downturn, the UK student housing market gained momentum to become the second-largest market in the world.
In terms of cities to invest in that have a growing student market, there are many across the UK. London has always been in the spotlight for student accommodation and housing due to above-average rental prices. However, any investor looking for the best rental yields and high demand may want to look further north. Cities such as Manchester and Liverpool promise returns and significant investment potential in a continually growing market. The UK is home to 11 of the top 100 universities in the world, which is why it’s no surprise that student property investment is a good idea. As it currently stands, the availability of student rentals and accommodation cannot meet the high volume of students coming to the UK to study or moving away from home.
Student accommodation is a low cash, hassle-free investment opportunity that can also be adequately managed. This means if you’re an investor wanting a hands-off approach, it’s an investment you’ll love.
RW Invest offers a range of attractive student propertiesstarting at as little as £59,995. Since students aren’t in the position to purchase a property to live in during their studies, investors can do this and offer them rental accommodation.