Building a diversified property portfolio is a fantastic way to mitigate any potential risks and improve capital returns. If you already have residential property in your portfolio, it may be time to start looking into PBSA.
PBSA’s are otherwise known as Purpose Built Student Accommodation and are developments that provide residence to university students. Generally, PBSA is a great investment for those looking for a low-cost entry into property, or a way to diversify a portfolio.
Student accommodation is usually a large, structured building which house multiple flats inside, and they generally yield an average return of 7% depending on the chosen area.
Some more benefits include the potential to avoid stamp duty and having an investment that is relatively recession proof due to the consistent need for affordable student accommodation. The typical rental window for students sits between 44-52 weeks, depending on the term times for the local university.
As previously stated, one of the most important aspects when investing in PBSA researching the properties’ location, as this can be the determining factor of the success for the investment. Taking time to properly do due diligence by checking the ranking of the local universities, the amenities located around the property and the overall student culture in the area will ensure your property is more appealing and ultimately successful.
Another way to create a successful venture in PBSA properties is to outfit the development with high specification, modern facilities. Independent reports have showcased that there has been a 68% rise in levels of demand for more high-quality PBSAs. Students are wanting accommodation that is nicely decorated, well located and features modern necessities such as fast WI-FI, gym access and extra features such as arcade room.
UCAS reported that during 2021, there were 2.66million students at universities across the UK, which represents a 300,000 increase on the previous 2 academic years. Growth in the student property space is clear, and given that covid restrictions have now completely lifted, we expect to see even more students enrol in summer of 2023.