The Student Property Market in the UK has received high acclaim both at home in the UK and across the globe. Student Accommodations has become one of the most exciting assets, according to Knight Frank. The increasing population of international students flocking to universities has put a high demand on suitable accommodations, which makes the yields from this asset far higher than the the ordinary renting options. Over £6 billion has been invested in student properties in the past 3 years.
Nevertheless, you would be wrong in assuming that by purchasing a random student property online you will begin to see a sudden influx of cool cash. As with any asset you hope to capitalize on you must invest wisely to expect a profit. So what would be the best way of going about making a smart investment in this lucrative asset class?
Adapt an HMO or Invest in a Purpose-Built?
There are some advantages of adapting an HMO – a family sized home- into a housing unit that can be rented on a room to student basis. By renting a single property to a number of students, property owners can economically invest in the accommodation of several students in one house.
On the other hand, there are several advantages to owning purpose-built accommodations. First and foremost are the more desirable and convenient locations and living standards that these purpose-built dorms offer. Which will translate in attracting higher quality tenants, in this case a more discerning type of student.
It is a simple fact that most students are showing a general preference to purpose-built accommodations. These purpose-built accommodations are also a preferred entry point for the novice investor. This is because individual pods can be purchased and managed as opposed to an entire home unit which can be an added fuss to fuss over.
Finally, purpose-built accommodations are, ironically, a higher-yield asset than HMOs despite their being a much more affordable option. Making them the more intelligent choice in the market.
One of the best ways to measure the quality of the student property you are considering is to verify the rankings of the universities in the vicinity. If there is a higher ranking university in the town or city in question, especially a university that is part of the Russell Group, then you can expect a much higher demand. After this, in order to ensure the top value of a property it is important that it is easily accessible to university campuses and be well located.
You can also enjoy much higher demand for your property investment by investing in properties located in towns and cities with more than one university.
Because of the growing numbers of students who are filling UK universities this student property market is in high demand and it is only expected continue booming as the universities lift their caps on intakes next year. Nevertheless, the student tenants are far more discerning now than they have ever been before and many investments will flop although they have all the components of a successful venture.
When investing in a purpose-built student accommodation it is important to consider the provider. If the development you invest in was produced by an experienced developer and operated by trustworthy company that has a good reputation and history of success with the student body, then you can certainly hope to enjoy some of what makes this asset field so highly celebrated.