Investment Properties: Serving The Student Property Market

by Bella Palmer

There are many options to consider when searching for good real estate deals. Of course, a look at the current property market prices only tells part of the overall story. There are definitely good deals to be had within the standard real estate market. However, many smart investors focus almost exclusively on properties that are offered for sale below the market rate. After all, when buying an investment property, the purchase price can make the difference between a profitable deal and a poor investment.

Student property is currently a very hot market within the real estate investment realm. Enrollment in UK universities is up, among both UK citizens and foreign students. The need for student accommodations is high, making student properties an attractive investment option. Today’s students are searching for better housing options, providing plenty of opportunities for real estate investors to fill the demand. Currently, the student housing market is basically undersupplied in almost every university city throughout the country. As such, it can be quite profitable for the individual wishing to invest in this underserved market.

Of course, the property investor hoping to serve the growing student accommodation demand must remain vigilant as to what constitutes a good property investment, and what could become a losing proposition. While it is true that student properties have the potential to provide relatively high profit yields, there are still pitfalls which must be avoided. As with most real estate investment, location can be a key factor to success.

When considering a student property investment, it is important to pay attention to the universities within the surrounding area. A property investment within close proximity to a university with a stable or increasing student body would naturally be a much better investment than a property located close to university in decline. Properties located close to universities which actively recruit foreign students are also good options.

The type of property is also an important factor to consider. In some cases, licensing can also be an extremely important factor to consider, especially if you want to house more than one tenant within a single property.

Acquiring a mortgage for a student property investment can also be a bit more challenging than for other property investment types, due to the more limited offerings. Not every mortgage lender is open to permitting students as property tenants.

Although the current market for student properties is high, there is of course no guarantee that this will continue over the long term. As such, when choosing a property, it is important to look at its potential usage from a number of different angles. When considering a property, take a close look at its location. Ideally, its location would easily lend itself to other purposes besides student accommodations in the future, if by chance the student market becomes less profitable. The ideal property would lend itself well to supplying the current demand for student accommodations, but could also be easily converted to other types of occupancy arrangements in the future. As always, choosing a property in a good location is key.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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