Start Investing: Investing in Student Housing

Imagine this: you have children in college and don’t want to see a fixed amount of money go up in smoke every month on rent. Or perhaps you’re looking for an investment with a solid return and moderate risk. Have you ever considered investing in student housing? There will always be students, so there’s no shortage of tenants. But is student housing a sustainable investment? That depends on several factors. Let us explain. Are you buying one or more student rooms? Do you prefer to manage them yourself, or would you rather work with a third party? Location also plays a major role in the decision to invest in student rooms and influences both the likelihood of finding a tenant and the return you can get on your investment.

Should you manage your real estate investment yourself or outsource it?

Should you manage the student rooms you’ve purchased yourself or outsource the management? Both options have their pros and cons. It’s easier to manage one or a small number of rooms yourself than an entire block of student housing. Doing everything yourself yields a higher return, since you don’t have to pay an outside party for their services. But there’s a lot involved: students come and go, you have to find a new tenant every time, and draw up a new lease agreement over and over again. If you encounter a rowdier student, there might be some extra maintenance work involved. So, do you have the time and patience, and don’t mind being closely involved in the day-to-day running of the student room? Then self-management is an excellent option. Outsourcing, on the other hand, has the advantage that you have very little to do yourself. You have a passive income—the third party ensures that everything runs smoothly. At least, if you choose a manager who has a lot of experience and handles things well. You run no risk of vacancy and usually receive a guaranteed return, even if the student housing is temporarily unoccupied. Of course, this means you’ll have to give up a portion of the rental income to the manager. Do you have capital to invest but no time (or patience) to manage the student housing yourself? Then it’s best to outsource this.

Student Housing: How to Stand Out

Now that you know whether you want to manage your investment yourself, you can decide on the location. This is particularly important for young students, because what student wants to spend more than half an hour commuting to campus? It’s therefore important to stay close to a university or college. Although a student apartment just outside the city center might seem attractive due to the lower purchase price, you’re less likely to find students to rent it to. Staying in a central location is a must. Be sure to look for regions where the demand for student housing exceeds the supply. Choose a location that is easily accessible by public transportation. If your student apartment is also equipped with all the comforts and has convenient shared spaces—such as a garden, secure bike storage, or a separate laundry room—then you have a real gem on your hands. A guaranteed return on investment!

Investing in student housing: the financial picture

The upfront costs for a student dorm are generally lower than for an apartment, which means you can expect a higher return—at least if you choose to manage the property yourself. Due to the constant influx of students arriving in college towns every year, this investment carries less risk than a real estate investment in the traditional housing market. Can investing in a student dorm be sustainable? Absolutely.  There are plenty of options for financing your investment. Do you have capital available, do you want to take out a loan, or are you curious if the bullet loan is one of your options? Drop by for a chat or Please contact us - then we’ll work it out together. Be sure to look for areas where demand for student housing exceeds supply. Choose a location that’s easily accessible by public transportation. If your student apartment also offers all the comforts and has convenient shared spaces—such as a garden, secure bike storage, or a separate laundry room—then you’ve got a real gem on your hands. A guaranteed return on investment!