November 16th, 2015
2015 has seen more people than ever before choosing to invest in student property. In the first half of the year, £3.98 billion was invested in student accommodation around the country, almost doubling the £2.35 billion seen throughout 2014’s entirety.
Ultimately, investing in student property can be a daunting but it definitely has its rewards. And here are five of the best:
Student property investments can produce some of the highest yields in the country, up to 5-6 percent higher than buy-to-let equivalents. Student rents have been increasing exponentially over the past few years- 25% between 2010 and 2013, in comparison to regular rents which grew by 13% during the same period. For investors, this means higher returns.
However, investors have to make sure they choose the right sort of student accommodation to benefit from the very best yields. 77% of students don’t expect to pay more than £100 per week for standard accommodation, yet a recent headline saw an American student spending £21,000 per month on their student apartment in London.
In short, choosing a development with extra facilities and high spec features will attract students who are willing to spend a little more, and will therefore give you better yields.
One of the most popular types of student accommodation is PBSA (Purpose Built Student Accommodation) which is a highly sought-after with modern students. These days students are not content with old-fashioned halls of residence, they want all the modern conveniences of home and more.
PBSA can offer students on-site gyms, cinema rooms and communal areas to socialise in. They typically have modern décor, as well as student must-haves including Wi-Fi and double beds. The demand for this type of accommodation is growing, recent research has proven that students prefer to stay in PBSA than student halls.
Student figures have been growing ever since the university fee increases of 2012. This year saw a record high of over 409,000 students being accepted on higher education courses, up 3% on the previous year.
This is partly thanks to the continuing appeal of the UK for foreign students. Every year the number of EU and non-EU students rises as people desire:
The idea of having to deal with students on a regular basis as a landlord doesn’t appeal to everybody. Managing your own student property involves always having to be on-call to do emergency maintenance, plus, attracting new student tenants every September.
However, the PBSA on StudentPodShop is all fully managed. This means that after making your investment, the management team at the property will be in charge of the room. All of StudentPodShop’s developments have specialist management teams who are experts at finding new tenants every year, as well as making university life as enjoyable as possible for the current tenant. Ultimately, PBSA aims to be a stress free investment.
As student numbers grow, universities are struggling to keep up with demands for accommodation. Most universities offer far fewer beds than student numbers, some cannot even guarantee accommodation for first years.
This forces students to have to look elsewhere for accommodation, often ending up on their own in expensive residential apartments or taking up family homes. This has been heightened since the cap on the amount of students universities were allowed to admit has been lifted in the last year.
PBSA offers students an alternative to these types of properties. Because they’re directly marketed at them, students often get all the facilities of traditional halls, and more. In fact, these days, universities often rely on PBSA developments to house all of their students.