Student Property Investment, Buy to Let – A Valuable Asset

Why student property investments are gaining in popularity? (Updated)

Britain’s universities are brimming with students from all over the world. Unlike students of yesteryears, the students today have cash to spare because their parents usually have deep pockets. These students look for accommodation that is close to their universities and is comfortable. Since they have high standards of living they don’t mind paying good rentals.

Every year Britain gets around 550,000 students. While the university residence halls can accommodate some of the students, mostly first years, the rest need to find their own accommodation. That means around 70% of students will be on the lookout for living spaces, which means the market is big enough for us to look at as a potential destination for our investment funds.

Thai students in Edinburgh 'BBQ' party at Holyrood park, with three guests from Liverpool (not in the picture).

Thai students in Edinburgh ‘BBQ’ party at Holyrood park

There is no shortage of students who wish to rent high quality accommodation. Top universities like Cambridge, Oxford, Edinburgh, etc. are the most sought universities. Therefore student buy to let investments in these areas gives good returns, other university towns like Brighton and Birmingham are also good areas to invest in. As long as students are coming to these universities, there will be a demand for student accommodation.

We are finding that luxury student housing is showing no signs of slowing down, so much so we are seeing Universities looking rather like property developers.

If you wish to be a landlord in a student buy to let property, the obvious choice is to make a property investment in a University town. If the accommodation is furnished and has double bedrooms it is likely to be in demand year after year. Students no longer like to live in shabby accommodation but have clear cut demands, they prefer accommodation that has more than one bathroom if there are two bedrooms.

With a high demand for student property there is a shortfall and so investing in property for the purpose of accommodating students means there is an opportunity to get good returns on your investment.

Higher education is a worldwide demand and universities in UK offer some of the best courses. Towns near universities are therefore milling with students so student housing demand is high. Student, buy to let investments in almost all of UK’s university towns yields high rentals along with capital appreciation. The more renowned the university, the more likely it is to have a huge student population and therefore the student buy-to-let market has a good chance to give you good returns on investment.

FJP Investment have always found the student property market to be a good starting point for when an investor is starting out in the property market. This area of the property market is supported by the fact that the UK is a top destination for students all over the world wanting to come and get a premium education.

Overseas students demand luxury accommodation and that is the most buoyant student buy to let investment sector presently. These students prefer comfortable bedrooms and don’t like box room accommodation. Another important aspect to consider before investment is to select areas that students like to haunt for example property near libraries or near market towns. So choose the location and the type of housing carefully if you wish to have good returns on your investment. You really can’t go wrong because the more the university population the more the demand for student accommodation and the more the returns with rents increasing by almost 3% each year.

Three Facts About Students - For a Student Accommodation Property Investment blog post

Three Facts About Students – Student Property Investment

UK Student Property Investment

The changing face of UK higher education has led to a very drastic change in the university culture, and this also had a huge impact on standard of housing for the students in United Kingdom. Nowadays, the admission criteria as well as the university tuition fees sit top of agenda for these business-minded, independent institutions, and the issues on student property investment has caught the attention of property investors like never before.

With student accommodation search engines making life easier for the student looking for accommodation it is no surprise that the market is well oiled and functioning smoothly.

The main key here is the growing number of students, as this kind of turn only means potential investment and higher revenue in the larger building and more efficient teaching, and the need for having a quality accommodation has only increased at the same pace.

For the universities that don’t have accommodation for their existing and future students, the demand for properties/housing is even becoming greater, and this kind of trend has led to the popularity of student property investment because this has been cited to provide high return on the investment mainly owing to the current demand levels.

Student studying in her student accommodation

The experts in investment rental property are also keen to follow this kind of wave, with the popular university location in UK like Manchester and Liverpool providing firm platforms for the student rental investment properties.

It should be reminded that there’s been a shift in the students’ culture of late, and the profitable, fast-moving universities are moving forward away from traditional approach like “student digs” to housing, and instead have a deep focus on having access to student property that will encourage effective development and learning during their university years.

The (then) new student housing block looming over Tottenham Hale Station.

The (then) new student housing block looming over Tottenham Hale Station.

As the universities notice this need of the students, the best way to ensure that the accommodation condition within the university city wall are of a high standard is to have a strong tie with the private sector that can possibly invest effort and time in providing the kind of accommodation that generate a better standard of living.

For the investors, the environment for this type of property investment is made more attractive when then investigating the details, because knowing that in recent times the risks tends to be the chasing shadow in property investment; student property investment manages to overcome this kind of barrier.

The traditional and rebellion views of the student house parties as well as the widespread destruction are the typical parallels that are drawn. However, investors in student accommodation investments are generally finding that with the higher premiums paid by student come higher standards of behaviour.

Student property investment has shaken the traditional and long-held views in this kind of investment environment, as the associated risks in this kind of investment are continuously reduced, the rate of returns are continuously increasing, which is why these are the best platforms for high return property investments.

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Is Commercial Real Estate a Good Investment?

Commercial Real Estate – Good or Bad?

Real estate comes in all shapes and sizes from big and small to wide and tall. There is no such thing as a one size fits all when it comes to sourcing real estate deals. For example, you could own the shop in Times Square rented to Apple or the corner store rented to Jack and his wife. The key outcome you should be looking for when making your investment is how much does it cost to purchase versus future growth versus rental incomes.

Investors tend to want high rental returns but with a focus on stability. So in answering the question “is commercial real estate a good investment?” we here at FJP Investment would agree that it is. We tend to find less defaults when it comes to tenants in commercial than you would in residential and while economies are retracting we are seeing the commercial sector hold its own.

In general, we have always found the commercial property sector to be favoured by our investors when looking for asset classes to make an investment. We love looking for a deal, seeing commercial real estate as a real good investment if done right. A lot of this comes down to research and being able to find the right commercial property at the right price.

Commercial real estate statistics

We recently wrote about the pros and cons of commercial real estate and we concluded that such investment was worthy of spending serious time analysing deals in order to better manage your money yourself rather than play the markets.

What is a Commercial Property?

  • Retail buildings
  • Office buildings
  • Warehouses
  • Industrial buildings
  • Apartment buildings
  • Mixed use buildings, where the property may have a mix, such as retail, office and apartments

The number one reason for making an investment in the commercial sector rather than residential is earning potential remains consistently higher. Commercial often achieves anywhere between 6%  and 12% meanwhile residential varies between 1% and 4%.

When investors say 10% is too good to be true, it is often because they have never looked or considered the commercial sector to know the it is indeed the norm.

 

Real Estate Investing 101

Another important factor to consider especially with the retail sector, they are often incentivised to maintain their retail presence… e.g keep paying you rent!

If they do not maintain their retail locations it will often affect business as become the talk of the town. “Did you know So & So shut down” etc etc

I think another key selling point for going into the commercial sector rather than residential is that you are generally dealing with professionals. Businesses dealing with you are often easier than inexperience residential tenants with very few real world obligations.

FJP Investment – Commercial Real Estate Broker

The business has evolved a lot over the last few years, we have kept our promise of only offering the very best deals that we have been able to get our hands on. We always focus on the customer and go out and get the product that our customers are in the market for.

More often than not friends can bring valuable experience to the table but often we find too little experience is often an inexperienced source of advice.

Our products are constantly updating, new ideas are launching and we welcome you to come along for the ride.

Interested in learning about the investment opportunities from FJP Investment?

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Infographic: New York Property Investors Guide

Infographic – Guide to Investing in New York Property

A global powerhouse that attracts over 50 million tourists every year to the “big apple” that is often described as the cultural and financial capital of the world.

New York Property Investors Guide Infographic

New York Architecture

The Chrysler building is considered by many historians and architects to be one of New York’s finest. Other options include Empire State Building.

Shopping in New York

In New York, you’ll find many of the best department stores in the world, including Bloomingdale’s and Macy’s NYC, and countless Fifth Avenue boutique shops.

Where to find the best food in New York

New York is one of, if not THE, greatest food cities in the world. Not only can you get just about any kind of food in New York even at almost any hour of the day.

Green Spaces in New York

The most famous green space in New York is of course Central Park. Others include Hudson River Park and Brooklyn Bridge Park. If in New York, be sure to get some rest time at one of the parks.

New York Art Exhibitions

The best art exhibitions and art galleries can be found in NYC. Be sure to check out the world famous Broadway Shows.

Live music venues in New York

Jazz, Classic, Rock… you name it New York does it in abundance. New York is the place to be for fresh live music.

  • The average price of an apartment in NYC has reached a record high of $1.87m
  • Trend of renting over buying driving up real estate prices by 11% from 2014
  • 99% of borough’s apartments and homes available for rent are occupied
  • The vacancy rate of NYC rentals reached 1.07%

Holding real estate in your portfolio in New York is deemed a prized asset of the global investor buying up prime real estate around the world. There is no doubt that New York’s importance as a leading city in terms of being first in business is set to remain.

New York is an amazing location and is at the top of the list when it comes to Real Estate investors wanting to park their capital in a top city, where they know the yields are high and their asset will increase in value over a reasonable period of time. New York is the trophy asset – Real Estate investors want to say “I own in New York”.

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