Investors should target foreign students' enclaves

There is a downside to being a real estate writer – because so many want to make money from property, you get asked a lot of questions to test your alleged expertise. This was the latest one, asked of me by a journalist friend: "If you had a spare £100,000 (Dh587,328), where would you invest it?"

Good question, and I came to my answer by looking at where you should not invest, then deducing which sector still looked good. The biggest residential losers in the downturn were buy-to-let investors who paid new-build premiums for over-specified properties in city centres swamped with similar units.

They all relied on young professional renters with high-paid service and finance industry jobs which themselves existed only because of a buoyant economy. It happened in cities in the United Kingdom and across parts of eastern Europe, too.

That was then. Now we should identify where there may be solid demand, even in a prolonged economic downturn: the student sector fits the bill, in the UK and in many other countries.

Even cash-strapped governments remain committed to ambitious education targets for their young citizens – anyway, when the going gets tough, the jobless increase their skills or learn new professions, so education stays a strong driver for renters.

The big cities in particular attract lucrative international students renting year-round.

I would look to London, Paris, New York or Shanghai to buy one or two mid-quality second-hand apartments in student enclaves.

 

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