Is investing in student accommodation in Ireland a good idea right now?

With interest rates at record lows, stock markets crashing and global economies stalling, it’s tough to find a decent investment opportunity right now. Stowing your life savings into a ‘high-interest’ account paying 1% makes it barely worth extracting the cash from the mattress, the wild fluctuations of stocks and shares offer as much security as the roulette table, and buy-to-sell property purchases have hit the rocks as housing markets on both sides of the Irish Sea start to contract.
Yet amidst the chaos, there remains a reliable haven for the smart investor to sit out the storm: Ireland’s buy-to-let student accommodation market. Here's why it’s become such a shrewd, popular opportunity.
property-investments-blog-1

Consistent returns on your investment

There aren’t many places you can expect to get a 5% return on investment these days, let alone the 10% or more that we regularly see our student accommodation investors secure – and that’s after all costs have been accounted for. Yields are consistently higher than other types of rental property, notably because these are HMOs – Houses in Multiple Occupation – so four tenants generate four monthly rent payments.

Student rents are payable in two upfront payments

Unlike the normal monthly rental model, most student accommodation is paid in two installments--the first one before the students move in, the second falls due half way through the academic year. So management agents (or landlords if you manage your properties directly yourself) aren't constantly chasing monthly rents.

There will always be students

Official figures show that for the year ending 2018, a record high 230,000+ students were enrolled at third-level institutions across Ireland. International student numbers leapt by 27% in just three years to 2019. Increasingly, Ireland’s higher education sector is an attractive destination for learners from both home and abroad. For investors, that’s a vast, growing quantity of people who need somewhere to live. Educational institutions don’t own sufficient land space and can’t keep pace with the demand, so the need for private rentals is still increasing.

A sector untouched by recession

This may be the most attractive benefit of all right now. When we said there will always be students, we meant there will always be students. Even, perhaps especially, during an economic downturn, people continue going to colleges and universities to learn. The double benefit to you is that in a contracting housing market, property purchase prices may go down, but the value of your rents does not.

Reduced risk…

Occasionally, we hear a misconception that student tenants are somehow a higher risk. But in our experience, nothing could be further from the truth. We always insist the parents go guarantor on any student lease, and they must back this up with a decent deposit.  Thanks to this in-built safety, according to a recent report, 69% of landlords in Ireland prefer renting to students over other tenants.

Student courses are for several years

Aside from making it more likely your student tenants will look after your property with care, one of the positives is that the students need to stick around for the longer-term. Most of them commit to three or four-year courses, perhaps longer, and having the same tenants for that length of time is great guaranteed income.

The secret to successful student property investing

Becoming a successful student property investor in Ireland doesn't have to be a time burden to you either-you just need to make sure you have a good management agent in place to look after things for you.

A word about student property management

Don’t try to manage student properties on your own because there are potential pitfalls you don't want to have to deal with. A good agent will make sure your investment is as hands-off as possible. They’ll interview applicants to make sure you get the right student tenants for your property, they’ll ensure the property is maintained as it should be, make sure rents are paid on time, and ensure you have a consistent, high-yielding income, year-on-year.

So whether you’re interested in investing in self-contained apartments in purpose-built student villages or turning privately owned residential houses close to colleges and universities into HMOs adapted for the student market, we work hard to source the right property for you and your investment goals.

best-student-accommodation-athlone

Get in touch today and find out how we can help you get a great ROI for your money.

After all, we must be doing something right-we are very proud to have been awarded Best Student Accommodation Provider for the Midlands at the Irish Enterprise Awards 2020!