Mar 23, 2021 12:00 PM EDT
Investment in Student Accommodation Property is Pandemic-proof
The impact of the COVID-19 Pandemic and the national response has been significant and wide-ranging throughout the UK's economy. Perhaps its impact on University Education and Student Accommodation has been one of the greatest challenges to ever be overcome by Educational Institutions, Students, and Student Accommodation property investors alike.
To see if 10-15% pa Returns on Investment can still be expected in the Pandemic and Post-Pandemic climate, and what to look out for in the Student Accommodation sector in the future, we speak to Property Finance Entrepreneur Duncan Kreeger, and founder of sector disruptor TAB.
With student property investments yielding between 10-15% historical gains pa, is this growth stable even with the transition to online classes during the pandemic and potential for the foreseeable future?
Yes, I believe that this growth will remain stable after the pandemic.
Higher education is in worldwide demand and UK universities offer some of the most accredited courses. I don't think the pandemic will deter prospective students from physically attending university either. The university experience isn't just the education, it includes living away from home and meeting new people.
Also, many subjects have had to adapt dramatically to digital classes however face-to-face lectures and seminars remain important in the education system and will return as soon as it's allowed.
The demand in university places means that there is also the demand for student property and with it the 10-15%pa yields that come with it.
Should university students be educated on how their student accommodation is an investment opportunity and should these investment opportunities be opened up to both UK-based and overseas students?
Yes, absolutely. I think that it's essential university students should be educated on real estate and real estate investments.
Having a financial education is one of the best investments someone can make. Learning that their student accommodation is an investment opportunity will help students realise the costs associated with running a property and the rewards that come with it. If the investment opportunities are opened up to students, they will have a direct incentive in looking after the property and might help them in the first steps to:
understanding the cost of maintaining a property and what requirements come with it;
understanding the borrowing capability, monthly cash flow; and,
make a return on your money.
This would better prepare students for the financial system and one way this could be executed is through fractional property ownership where investors, or students, in this case, own a portion or a share of a property and have that portion of the monthly rental income.
Over the next five years do you see property investments, especially within the student accommodation market changing, and if so how?
Yes, I think we're going to see a change in property investment. At TAB, we're opening up the real estate market to a much wider cohort, from a minimum investment of £1,000 it makes property investing much more accessible.
Through fractional property ownership, you can purchase a share of a property and income is earned on your investment from the rental income received from tenants. TAB takes care of the legal and management side of property investments, so there are no mortgages, no estate agent fees, no banks and no management required by the investors.
Fractional property ownership could work for any type of property, including student accommodation. Our platform in the future will allow for the sale of your share, making property investments a liquid market, much like the stock market. This might be attractive to students who might want to invest in the property they're residing in, benefit from the rental income, and then sell their share at the end of their university course.
Duncan Kreeger is confident that Investment in Student Accommodation has a strong future, despite the effects of the once in a century public health crisis. Not only are historical returns of 10-15%pa expected to remain, but through innovative Property Investment digital technology, like TAB, this sector is now more open to new and established investors and entrepreneurs than ever before.
Will there be the hoped-for parallel revolution and increase in financial and investment literacy among students and young people? Only time will tell.
(Image courtesy of https://tabhq.com)
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