[Special Scoop] Condos close to schools and universities have been a booming segment in the past few years. In general, parents usually purchase a unit as a residence for their child that can later turn into an asset for rent when their son or daughter graduates. Some condos offer a yield rate up to 6 per cent, which is a decent return.
However, the Association of The Council of University Presidents of Thailand reveals the admissions number in 2016 decreased from the previous year. The number dropped by 27,400 students, and this could imply lower residential demand in this segment in 2017.
A question that needs to be answered is whether or not condos near educational institutions are still an attractive investment in 2017?
Despite the smaller admissions number, there is strong support that this segment is still a sound investment. Here are two reasons why.
- Students are not the only target
Even though there are fewer students attending universities this year, it does not mean you will have difficulty finding a tenant for a condo unit in this segment. Your tenants could also be teachers, security officers, or locals who work in that area. Even if you cannot find a tenant, the price of the asset will keep rising through time, as is the nature of real estate.
- The next wave of students is coming soon
Every year, your prospective tenant base is renewed with the latest freshmen class. Some universities, mostly international ones, have a trimester learning course, which means a new wave of potential residents are coming in every 3 months. Moreover, most students tend to stay at the same residence for the whole university life, meaning you could earn monthly rent for the next 4-6 years depending on the field of his/her study.
In addition, Surachet Kongcheep, Associate Director of Colliers International Thailand, states that condos near universities are still attractive for both investment and residential purposes. “In Bangkok, condos nearby private universities will receive great feedback, while property market in Thailand’s provincial regions are promising for condo developments around both public and private universities,” says Surachet.
In conclusion, condos near educational institutions are still an attractive investment in 2017. Nevertheless, you must assess the demand and supply of each location. For example, Bang Na District is an unfavourable place to invest since the areas around Assumption University are oversupplied with condos and apartments. On the other hand, areas around Siam University on Phetkasem Road are a better location for investment since it’s a highly-populated area with a limited number of new project launches.
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