The Secret to Successful Student Property Investment

By: Invezz
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on Sep 18, 2015
Updated: Oct 24, 2019

Student property has grown very popular over the past few years, and its popularity is continuing to grow. Once existing at the specialised edges of the property market, it has now become big news and, according to Knight Frank, the UK’s best performing class of asset. In the first half of this year alone, the sector received £4.2 billion of new investment. But no asset class, no matter how high-performing, guarantees success. What is the secret of profiting from student property and choosing an investment that will deliver the kind of performance that has drawn so much attention to the sector of late?

At least part of this secret is to choose property that is both high-quality and well-located. A lot of the news stories about student property emphasise the fact that the market is severely undersupplied. This is true, but it’s important not to make the mistake of thinking that students will take anything they can get. Despite the short supply of accommodation, today’s students have higher standards than their forebears. This is perhaps a by-product, at least in part, of high tuition fees. When students pay so much to attend university, they are less willing to put up with a bedroom in a poorly-maintained family home or even low-quality purpose-built accommodation on the grounds that it is simply part of the student experience. Third-rate accommodation, or housing on the edges of town that will leave them with a long commute to their lectures, may struggle to attract tenants or only command disappointing rents.

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Other headlines will tout this as the secret of success in the student accommodation investment market in and of itself, but in truth this factor on its own is a little too narrow to truly be said to represent the key to student property investment success. Really, the secret is to understand what the student of today needs, wants and, consequently, looks for. Good-quality, well-located accommodation is certainly a big part of that, but it’s not the full extent.

Another important factor is the balance between privacy and a sense of community, and this also happens to be one of the most frequently overlooked considerations when it comes to student property. Many students are looking for a kind of communal living experience; a chance to get to know their fellow students, form close bonds, and have a social element to their universal experience even in their living space. However, many students also want the kind of privacy – for study and for general living – that is hard to get in a traditional shared house.

Purpose-built student accommodation, by combining self-contained studio apartments with some shared facilities and even on-site social venues such as gyms and entertainment rooms, has the potential to strike a very effective balance between the two. However, some developments tap this potential better than others, and considering this when making a purchase can make a real difference to the success of your investment.

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