Benefits of investing in student cities - Emerging Real Estate

Benefits of investing in student cities

21/11/2010

 Benefits of Investing in Student Locations

As you may well be aware from our website, we have a number of UK properties in and around the popular university towns of York and Manchester. Investing in properties with the intention of benefiting from the local student population is one of the more low-risk, high-yielding strategies when it comes to real estate.

Even with the recent news regarding fees and tuition costs, one thing is certain – there will always be a market for students looking to rent accommodation and with a little thought and preparation, it’s possible to achieve significantly better yields than if you were letting to say, a normal family.

Recently, more and more parents have been looking to become more actively involved in their children’s university housing to the extent where many individuals see this as an investment opportunity. In this respect, you can rest assured that your son and daughter is in good, comfortable accommodation for the duration of their course, then once they are graduated you are free to maximise the returns by renting out to subsequent students every year, ie demand will never diminish. It’s also worth bearing in mind that in a lot of university towns and cities, student accommodation can be sub-standard which results in a demand from certain groups (students from wealthy families, foreign students) for better options. Figures show that in the last ten years the number of students living away from University provided halls has fallen from 33% to 25%.

For example, important University towns such as Manchester, Nottingham, Durham and York receive thousands of new students each year and in these towns, it’s relatively easy to achieve rental yields for student accommodation in the region of 10%. Compare this to standard buy-to-let markets of 5-7% which may also be impacted upon by high unemployment – something non-applicable to students.

Due to the sustained demand for student property, the market is healthy and offers yet another option for buy-to-let investors. For more information on our UK properties, please do not hesitate to get in touch.