Property investors could be missing out on the blossoming student rental sector as they are unaware of the potential returns it offers, says property investment firm Experience Invest.
According to a new report by the company, just 17% of respondents said they are aware that investing in student property can result in a high yield.
In the first half of 2015, £3.8 billion was invested in student property in the UK and this is expected to rise to £5.7 billion by the end of the year.
The number of students is rising and over the next decade the figure is expected to double. The UK is also becoming an increasingly popular destination for foreign students as well.
Dale Anderson, project manager at Experience Invest, has pulled together facts for investors highlighting the top five reasons student housing has been propelled into the mainstream:
1. High yields
Depending on the location of the project, investors can generate between 8% and 10% NET per annum from a student property investment. Much higher than the average 5% generated from traditional buy-to-let property.
2. Managed and Maintained
Student property investments are typically fully managed and maintained by a specialist property management company who will have links to the local university. Investors can receive passive returns from an asset which is professionally managed and maintained.
3. Demand in market
Rising student numbers means there is a strong demand from rooms in key university towns and cities. The demand for accommodation varies from location to location and investors should ensure there is a need for this type of investment before buying.
4. High standards of living
Tuition fee increases have made today’s student savvier when it comes to money. HMOs (House in Multiple Occupation) were once a popular choice for students however, there has been a shift towards purpose-built developments. Many students find this form of accommodation cheaper in the long run as all bills are included and they typically include free access to an on-site gym, cinema room and even TV rooms with built-in entertainment stations.
5. Anyone can invest
Traditionally, purpose-built student property was not available to the individual investor, however, investor sentiment has shifted in recent years.
