Student-targeted condos are hot properties for investors

Real estate has historically been the most trusted of long term investments. And now there’s a new twist as investors have discovered student-aimed residences located near major universities that offer the security of owning real estate with a builtin steady base of demand. The student housing trend is forecast to continue upward. Worldwide student populations continue to grow as higher education remains the best entree into career employment. Canadian universities are highly desirable destinations for international students coming from China and South Asia, assisted by the federal government’s Student Partners Program operating in China and India. The increasing number of international students on top of the consistently healthy domestic levels of enrolment in higher education has combined to fuel the emergence of this new asset class in Canada, already well established in the US followed closely by the UK. The student residence or condo primarily differs from an ordinary condo by the number and nature of its amenities, estimated to add up to $30,000 per suite more value. Investors are recognizing that having high quality amenities and programs delivered by onsite management will maximize the value of these investment properties. Research in the UK reports that students are willing to pay higher rents for purpose built accommodation. Parents of international students have demonstrated that they are also willing to pay a premium for safe and clean accommodation, and even more for housing that offers a wide range of amenities expressly designed to help enrich student life. Depending on the size of the nearby university, new student-targeted developments range from boutique-size to extensive multi-building complexes. Many have convenient retail in the complex such as grocery and convenience stores. Architecture and features are designed for student living with amenities that offer places to study, interact with fellow students, exercise and relax. Units are rented furnished and properties are fully managed making them ideal for out-oftown investors. Some trends are just trendy but purpose built student housing is here to stay. All the key factors are in place for success; high quality educated tenants who often have family or government financial support and a built-in, renewing, and recession-proof rental demand.