The Benefits Of Investing In Student Accommodation

Investment property opportunities come in all shapes and sizes. There is a diverse range of properties and property investment strategy to choose from. It makes it ideal for developing a diverse investment portfolio for all stages of the property and economic trend cycle. It’s an asset that targets the financial objectives of yield or growth equally well.

Here, we highlight eight benefits of investing in student accommodation – a sector of the UK property market that offers very attractive yields for income seekers.

1. Student numbers are soaring

Despite increasing tuition fees, there are more young people entering further education than ever. In 2015, record numbers of applicants had received for UK university places; a total of almost 600,000. The trend indicates that this number will continue to rise.

It is a huge pool of demand, and all of whom need accommodation.

2. Universities can’t keep up with the demand for accommodation

Traditionally, students would stay in halls of residence at the university in which they studied. But with the soaring demand, there simply aren’t enough rooms available on campus. Many universities now only allow first-year students to stay in their halls of residence. Even so, many first-year students won’t get a room.

Second-year students and beyond partner up with their friends and rent private accommodation.

3. Student accommodation is recession-proof

People don’t stop going to university during a recession. In fact, the opposite is probably true. When fewer jobs are available, school leavers are more likely to consider a course of study. So, student accommodation is recession-proof, providing a greater certainty of income for the buy-to-let investor.

4. Net yields are higher than many gross yields

Student accommodation pays a better yield than the standard buy-to-let investment property. It is because they are HMO investments (houses in multiple occupations). In a three-bed student apartment, you will receive three lots of rent.

So, you’re likely to receive a net yield that is as high as (or even higher than) a traditional buy-to-let property.

5. Purpose-built student accommodation is attractive

Purpose-built student accommodation provides all the benefits of living in halls of residence. The best are only a few minutes’ walk from the university, and close to local nightlife, shops, and work opportunities.

If you invest in purpose-built student accommodation, you eliminate many of the disadvantages of HMO v BTL investment while retaining the benefits of higher yield and shorter void periods.

6. Rent is guaranteed

We are not talking about developer guarantees.  Here we are highlighting the factor that’s students have parental guarantors when renting, accommodation, meaning the guarantors will pay any unpaid rent That’s the rent guarantee.

7. Your property investment is managed

Custom-built student accommodation usually includes property management. It may be provided by the university itself, or by the building administrators. You benefit from ‘boots-on-the ground’ investment management that is active and proactive.

Summing up

The dynamics of student accommodation provide a greater certainty of income. As a recap, a property investment in student accommodation benefits from the following:

  • There is a large and growing student population
  • Universities can’t keep pace with demand for accommodation
  • Higher education is recession-proof
  • Net yields which are often higher than traditional BTL gross yields
  • Purpose-built student accommodation in which students want to live
  • Parents act as rent guarantors
  • Professional property management


Golden Opportunity:

Aspect 3 Sheffield- Purpose built Student Accommodation
Find out more

Feature investments