Student Accommodation - A Growing Real Estate Market
Student accommodation is definitely one of the fastest growing ventures in real estate industry. Just as more and more students enrol themselves for higher learning, many academic institutions are not capable of accommodating the huge entries of students that pour during enrolment period. With that, some students would need to look for alternative accommodation near the campus.
The Great Opportunity
Real estate investors have seen the insufficiency in student accommodation as a great opportunity to take advantage with. That is why many of them are now filling up the insufficiency by pursuing accommodation projects for the students. What made this business to become even more interesting among real estate investors is the fact that the essential aspects needed to establish accommodation projects for students will only need basic commodities such as beds, water and electricity. Moreover, it's a venture that does not necessarily require a huge amount of capital compared to establishing commercial and residential properties would do. Being able to obtain the ROI (return on investment) in just a short period of time is apparently the reason why this real estate venture could mean great success.
The Considerations to Make
Typically, there are few fundamental considerations that have to be made when planning to go into this business. First is whether to target students who have limited budget or target those students who can afford luxurious amenities. Next is whether to cater all boys, all girls or co-ed. Another is the number of students who will occupy each room. Security or safety measures in general are very important as well since you are dealing with the students. The design of the building will usually depend upon these considerations. The total expenditure for a simple building is not that really expensive, while the returns are very profitable because of the growing demand.
Challenges to Meet
Although the growing demand for student accommodation has opened great opportunities for people in the real estate world, a few challenges would certainly come along. One is the fact that students are only up for short-term tenancy. As soon as they finished their courses, they immediately move out. The good thing is there are always students who will come next. The juvenile nature of the students could also be a challenge. They can damage your property intentionally or unintentionally. That means that you need to allocate contingency funds to for the repairs. However, you may also include in your policies that they have to compensate the damages they made.
The safety standards to meet set by the housing authority along with a number of requirements to render could also be very excruciating. But as soon as you are able to comply all the necessary requirements and the security or safety standards of the building, then everything will go on smoothly.
Indeed, student accommodation is undeniably a great business opportunity in real estate market. There are a few challenges to meet along the way, nevertheless they are very simple to deal with provided that you know the most effective solutions such as those suggested above. The effort, time and money spent for a student accommodation project are entirely gratifying once you start reaping your profits.