During the past few years, student accommodation boomed from just a niche asset class to an international centre. The speedy and steady increase in a number of students worldwide supported this outstanding boost. For instance, the number of student accommodation investment in the UK grew because of the increasing demand from overseas students.
With high demand for housing and great yields on offer, student accommodation is the next big investment. The secret in making a great investment is to understand what you are getting yourself into. A key aspect to consider is to get the type of property right.
Self-Contained Student Apartments
Self-contained student apartments offer an en-suite bathroom, small kitchen, living room and bedroom. They usually come in blocks and will have shared facilities like laundry services and gym. This type of investment property come fully managed and is sold off-plan.
Its benefits involve resale value, hands-off investment, achievement of student’s expectations and appeal to the overseas market. However, you will have to face development and management risks that come with buying off-plan.
Student pods are just single rooms with a student block that includes shared facilities like the kitchen. Just like self-contained apartments, this is sold off-plan and is fully managed. The advantages of this type include hands-off investment, guaranteed rents at high returns and low cost of entry.
Meanwhile, you have to deal with the resale potential for this option because the possible pool of buyers is smaller. You will also have a hard time finding a mortgage, as well as, tenants besides the management and development risks.
In the end, you have to base the kind of property you choose the kind of investor you are. Once you have a potential choice, do some thorough research, invest with a margin of safety and get to know the kind of investor you are.