Do you want a capital investment with a manageable risk but a good return? Then start smart: with a student apartment. The entry costs are low, demand is consistently high, and with the right calculation, you can achieve a net return of over 10%. Here I show you how this works in practice – with a practical example and clear tips.
There is a housing shortage in almost all German university cities – and this is exactly where your investment comes in. Small apartments or shared apartments near the university(map with universities) are always in demand, and you can buy, upgrade and rent them out directly without a lot of start-up capital – stress-free via a property management company.
Constant tenant turnover is an advantage
Students are moving more frequently, starting a new semester or changing cities. For you as an investor, this means: no fear of vacancies, but constant demand – especially in central locations or close to the university.
Compact size = high efficiency
An apartment with 20 to 30 m² will cost you less to buy and less to maintain. At the same time, you can achieve more rent per square meter than with larger apartments by equipping it with a kitchen and possibly furnishing it.
Little effort, clear processes
Instead of taking care of rental contracts, utility bills and minor repairs yourself, you can commission a property management company – ideal for beginners or if you have a busy work schedule.
High demand all year round
Compact properties with strong returns
Hand over administration completely
What you should consider when buying
When it comes to student apartments, location counts. If you buy centrally, you will get more rent and find new tenants more easily. It is also important that you have the incidental purchase costs under control – and know your net yield, not just the gross figure from the exposé.
Only proximity to the university brings real returns
The classic: a small apartment within walking distance of the university or with a direct subway connection. Without this, it will be difficult to reach the target group – especially for smaller units.
Keep purchase price low
The trick is to find a solid property below market value – e.g. in a basic condition that can easily be upgraded with a little paint, a new kitchen and furniture. This will increase the value without you having to dig deep into your pockets.
The monthly costs for property management (usually €25-40) are manageable – in return, you get peace of mind, professionalism and legal protection. This is worth its weight in gold, especially if you have several tenants per year.
Do you want more than the standard price? Then invest specifically in equipment – and target students who don’t want to organize their own furniture or kitchen.
Fitted kitchen as a rental booster
For €399, you can get a modern, small fitted kitchen with a fridge, hob and storage space. This will immediately set you apart – and you can easily charge €50 more rent. Many students specifically look for apartments with their own kitchen.
Fitted kitchen = 399 €
Surcharge per month = 37.50 (at 1.50 € / m² for 25 m²)
Amortized in 11 months
To do this, make a handwritten note in the rental agreement that your tenants are responsible for any damage or repairs to the fitted kitchen.
Furnished = more rent, less vacancy
A simple bed, desk and wardrobe – that’s all you need. You can include the furnishings in the rent; many tenants are happy to pay for this as they don’t have to buy or transport any furniture.
Paint once = better effect
A light coat of paint makes a big difference. Clean walls and a well-maintained floor look immediately more modern – even if the substance is simple. The effort is minimal, the effect is great.
Kitchen: +50-100 € rent possible
Furnished = reach target group directly
Looks count – even for students
Micro-apartments as an alternative or extension
If you want to scale up the concept, take a look at micro-apartments – they work in a similar way to student apartments, but are often more modern and also appeal to young professionals or commuters. Advantage: often slightly higher rent, same basic logic.
More target groups, similar strategy
You can reach more tenant groups through better facilities, services (e.g. Wi-Fi, cleaning) or location in business districts. The principle remains: small space, high rent, low vacancy rate.
Investing through society
Especially if you are buying several units, it is worth taking a look at GmbH structures in order to work efficiently from a tax perspective. We will be happy to advise you on this – or you can learn more in our further videos.
Student apartments offer you a solid, calculable entry into the world of real estate. If you buy cheaply, modernize a little and adapt to the target group, you can achieve realistic net yields of 8 to 10 percent. Even better: you hand over the management directly – and have created your first real investment property with a small apartment. Now it’s up to you to take the next step.
Micro-apartment as a capital investment: advantages for you
Small apartment with 25 m² instead of a large 4-room apartment. Why? More and more people are living alone in single households. Students, singles, holidaymakers, but also professional groups such as fitters, who are often in different cities. Learn more about investing in small condominiums, so-called micro-apartments, here.
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