Investment in student lets in Madrid is currently an attractive option. As supply is currently falling short of demand. This may be thanks to a significant increase of people studying at university level. Along with an increase in population of 18-24 year olds between 2018 and 2025.
However, there is currently a shortfall in accommodation availability for students. And surprisingly, some students are even struggling to find accommodation. Which accounts for as many as 380,000 students in total.
Universities and religious orders generally own some student lets. However, private landlords own the majority of it. Who continue to be trailblazers in change. Where student properties has invested vast interest from investors.
However, investing in student accommodation doesn’t come without it’s challenges. Because generally more work is required. Such as ongoing maintenance of properties. Or dealing with all-inclusive contracts.
There are a number of cities in Spain which are considered to be under supplied in terms of student accommodation. These include Valencia, Malaga and Seville, to name a few. Rents aren’t as profitable in these regions. However, finding reasonably priced development space is easier in these regions.
In Spain, there are around 328,700 students that come and study there. However, only 93,600 beds exist for students in the whole country. And investors have a real opportunity to develop a range of different types of accommodation for different students. e.g. some students prefer fully catered campus flats. Whereas others prefer self-catered city centre apartments. In Madrid, students are happy to pay 1000 euros to have high end accommodation. In contrast, more students in other regions are happy to settle for middle of the range offerings.
Timing is important for investors wanting to put their money into student accommodation. As students are keen to arrange accommodation way before the beginning of the academic year. Investors risk loosing money if they do not let their properties by September. Which means that money is likely to be lost for the rest of the year.
Student lets in Madrid is currently not keeping up with demand. Largely fuelled by the large number of people studying at university level. Surprisingly, as many as 380,000 students are struggling to find accommodation. Private companies remain the main type of student landlord. Student lets can be problematic to manage. However, it remains an attractive investment option in Madrid. Landlords who are able to meet the needs of different students are almost guaranteed a decent monthly income. Critically however, landlords must ensure that their properties are ready well before the beginning of the academic year. If not, they risk losing money throughout the year. As students are likely to have signed a contract with another landlord.
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