In the current economic climate we are seeing reports on the number of advertised jobs beginning to decline, and as a result, the number of graduating high school students turning to further study rather than heading straight into the workplace is increasing. You may wonder what this has to do with the property market. Well, many students need somewhere to live while they study, and when you consider the number of international students and the fact their enrolments went up by 27% last year, it makes more sense. Whilst many in the real estate market end up renting their properties to students, dedicated student housing different again, and an investment option that should not necessarily be overlooked.
One of the reasons many investors are attracted to student housing is the ability to generate more income from the same space as if you were considering the likes of a professional tenant. If you get more tenants into the one space, your rental income can quite possibly increase, and regardless of the location, often the yields associated with student accommodation are higher than when compared to renting to non-students. And if you manage that well, your vacancy rate will often be low – often helped by the multiple persons in the property.
It's not all guaranteed success however, just as any investment rarely is. Increasing the number of tenants in a property may increase your income, but it can also increase the number of issues you have. As much as I hate to perpetuate a stereotype, students have been shown to be more likely to take less care of your property than other tenants, and students can often require furnished accommodation, down to towels and linen which can cause additional headaches and costs.
Student housing is much like any investment opportunity that you may be considering, and as such it should be considered carefully. If property is your favourite form of investment, then buying in university towns should probably make up part of a diversified property portfolio that isn't solely geared towards students. If it's something you're considering, or even if you're just looking for an investment property generally, have a chat to your local Century 21 agent about the best property options in your area.