One of the best performing asset class that has been outperforming all other investment opportunities in the commercial sector for many years is student accommodation investment.
It is the nature of student accommodation that been the key driving factor for the high rental returns. If we look at regular residential dwellings there are several rooms with separate living area, kitchen area, dining room, bedroom etc, taking up valuable space. However, with student accommodation it is far easier to have a dorm like structure and fill the development with higher number of beds. The overall result is high number of paying students sharing a single kitchen and communal area. The additional profits give investors a higher return on their investment.
The UK is becoming increasingly popular with overseas students and due to a lack of purpose built accommodation to meet this ever increasing demand student accommodation is proving to be an extremely profitable investment.
Very often student accommodation can be an off-plan investment. When you as an investor purchase off-plan you will purchase at a much lower price than the actual valuation of the property when completed. When the property is completed you have 2 options, either sell for a quick profit or hold on to the property and benefit from the rental income as well as the capital appreciation of the property as it increases year on year. Most savvy investors with superior experience choose this route.
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