Property Insights Podcast

Stay up to date with the latest news, insights and market updates with Select Property Group’s podcast.

X

Understanding Your Tenants: Student vs. Residential

As with any asset class, choosing the right investment for you depends on your objectives, budget and preferences. Both student and residential property investments generate strong and consistent returns for investors, but which is the right investment for you?

Select Property Group are real estate experts with over 17 years’ experience, raising the benchmark in the Build to Rent sector with luxury rental brand Affinity Living. The Group is also the exclusive sales partner of Vita Student, the UK’s leading Purpose-Built Student Accommodation (PBSA) provider. This article explores the pros and cons of investing in each type of property, helping you decide based on our first-hand insights.

Vita Student central lobby

The pros and cons of investing in Purpose-Built Student Accommodation (PBSA)

Before we look at the priorities and expectations of today’s rental market across the residential and student sectors, let’s take a look at the advantages and disadvantages of investing in each.

 

Purpose-Built Student Accommodation (PBSA)

PBSA is designed, developed and managed to deliver a high-quality living experience, and has established itself as the strongest student property sector with high demand from domestic and international students. Amenities typically include strong Wi-Fi, communal working spaces, building management and security, a gymnasium, events hubs and more. Find out more about the different types of student accommodation in our Guide.

Advantages

 

Disadvantages

The pros and cons of investing in Residential Build to Rent Property (BTR)

In recent years, the Build-to-Rent sector has raised the benchmark for premium rental living and is the modern city-centre home of choice for millions across the UK. Emerging as a sector, Build to Rent accounted for just 4.2% of all new build completions in 2018, climbing to 5.8% in 2019 and to a further 6.6% last year. Directly responding to the tenant demands of today, amenities typically include access to strong Wi-Fi, communal outdoor space, co-working areas, resident hubs, a gymnasium, a pet-friendly policy and more.

 

Advantages

 

Disadvantages

The Build to Rent sector has raised the bar for city-centre living

The key to making a high-demand property investment to deliver strong returns is understanding your tenants. By delivering on their wants and needs, you can expect healthy returns and a high retention rate.

Understanding your tenants

Although both tenant groups are of different demographics, there are many similarities in the expectations of today’s property rental market. Amenities such as access to strong Wi-Fi, a gymnasium, co-working space and communal outdoor areas are non-negotiables for many tenants across both groups – trends accelerated by COVID-19.

Let’s compare the top priorities of both groups:

In Knight Frank’s 2021 survey, students living in PBSA were asked which amenities they’d be willing to pay a premium for. Here are the top 5:

  1. 1. Fast Wi-Fi included (66%)
  2. 2. Larger bedroom (55%)
  3. 3. On-site gym (51%)
  4. 4. 24-hour security (45%)
  5. 5. On-site laundrette (42%)

 

Similarly, according to JLL’s 2020 report, Home is… for everything, the top tenant priorities in the residential market were:

  1. 1. Strong Wi-Fi
  2. 2. Larger living areas
  3. 3. Access to outdoor space

 

Other priorities across both tenant markets are bright and modern interiors, high-quality white goods and 24-7 management. All amenities and services mentioned are priorities of today’s purpose-built developments across both sectors, so by choosing the right developer, investors can rest assured that the demands of their markets are met.

Property consultant advice

When it comes to making any property investment, the first step is to have a conversation with a property consultant, who will talk to you about your property investment goals, preferences and budget so they can recommend the most suitable options for you. They will then go through projected yields, capital growth, payment options and answer any other questions you may have. For residential property with mortgage options available, you should seek professional advice from a mortgage broker.

As is the case with any investment, you should conduct thorough research before making your decision. Here are a list of considerations to discuss with your property developer:

Location

For Build to Rent property, make sure your development is in a high-demand location with a strong economy, increasing population and high projected growth. Cities such as Manchester and Birmingham are performing exceptionally well, as the North West leads the housing boom with prices up 15%. As for prime PBSA cities, developments within walking distance of Russell Group universities are reliable high-demand investment locations.

Building and tenant management

Both sectors offer fully-managed options, giving the investor a hands-off, hassle-free approach and giving their tenants a seamless experience. For more hands-on investors, residential properties can be managed and tenanted independently.

Rent price expectations

Rent price varies depending on apartment specification, size and location. But by offering luxury amenities and facilities, tenants across both groups will be willing to pay a premium at the higher end of the rental market.

Developer credibility

It’s important to make sure you are investing with a credible developer who can demonstrate a strong property portfolio of successful developments and years of real estate experience. Positive investor and tenant testimonials are also a good indication of reputability.

How to invest with Select Property Group

Whether your priority is higher rental yields, capital growth over time, or a hands-off investment from overseas, we can help you find the right investment for you.

At Select Property Group, we offer an end-to-end service for investors – from initial consultation right through to exit strategy via our in-house brokerage. Investing with us starts with a conversation with one of our property consultants, who will talk you through the process from start to finish, arrange a virtual or face-to-face tour and be on-call to answer any questions you may have.

If you need further guidance to decide , get in touch with one of our property consultants on info@selectproperty.com to arrange a call.

WHAT OUR CURRENT INVESTORS SAY

"It Will Only Be Select Property Group
That I Trust to Invest with in the Future"

This is what our current investors think of their experience with us.
Start your investment journey and have your story published here.

View Our Projects

“I wanted to invest in British real estate, due to its stability and returns in a strong currency. Select’s reputation and proven track record of results sold their investments to me over other UK developers. To date I’ve been extremely satisfied with my investments, and I’ve already been confident enough to refer Select to several of my friends.”

Mshindi B Kenya-based investor

“To date I am very satisfied with my investments, not just from a capital gains perspective, but with the personal level of service and attention Select Property gives to each individual investor throughout the entire sales and property management process. As an overseas buyer, I’ve found it very easy to invest in the UK with Select Property, and I’d be very open to investing with them again in the future.”

Colin C US-based investor

“I have also successfully referred other investors in Egypt, as I was deeply convinced that others would be as attracted by the great investment potential and Select Property’s professional management standards as I was. For sure I will be investing in the UK again, solely with Select Property.”

Sherif D Egypt-based investor

“I’ve bought a number of different products as I’m very confident that Select Property can deliver success in different real estate sectors. With each property, I’ve been pleasantly surprised at just how easy the whole investment process was. So far I’ve bought more than six properties and it will only be Select Property that I trust to invest with in the future.”

Khalid Z Lebanon-based investor

“The returns I have achieved so far are in line with initial expectations promised by Select Property, while my properties have also enjoyed notable capital appreciation. Select Property’s dedicated team of professionals have made the investment process clear and simple right from the start.”

Antony L Thailand-based investor

“Select Property has developments in the best locations, and the quality of their properties have been proven time and time again. Growing a portfolio is very important, and having a trusted partner is essential to building your portfolio successfully, so I will definitely be trusting Select Property again with any future investments.”

Mohammed A Kuwait-based investor

“After doing my research, I chose Select Property Group because of their impressive track record and their full-service approach; I found very few other developers that would manage my property for me, too. Every person I’ve dealt with has displayed huge professionalism and demonstrated an incredible knowledge of the UK property market.”

Brian M South Africa-based investor

“The investment process was made very easy. If I ever had a problem and needed more information, every person at Select was very helpful and friendly, explaining everything in detail and always returning my calls promptly. Going forward, it’s made me very interested in investing in any future developments Select bring to market.”

Avril W UK-based investor