Before you invest on accommodations purposely built for students, it is important to understand the hidden risks as well as benefits in order to prevent any future problems. Student housing includes “pods” or “studio” suites built near universities or colleges in a city. These buildings often have their own gym, restaurants and other amenities.
Some buildings are built like a mini-hotel, thus, also come complete with a concierge and just about any amenities that a hotel had. Investors who are interested can buy a single pod or more depending on how many they are interested in. The management of the pods are usually handled by a third-party team, that is – from finding students to lease the rooms, collecting rents and paying out the investor.
Benefits and Risks
One of the benefits of owning these types of accommodation is that the potential to earn more is higher compared to just saving through the banks. Another is that since a management team is responsible for finding occupants for the pods and maintaining the property, investors no longer have to worry about the responsibility and just wait for the rental fees to be paid out to them.
That being said, there are some hidden risks that an investor has to also consider and one of them is the possibility of mismanagement. Fees for property management are also deducted from the rental reducing the total income. Finding tenants might also be hard especially during off-season or when schools are closed.
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