Should you invest in student digs?

Investing in student accommodation can be a risky business. Matthew Partridge explains why, and tips one real estate investment trust to keep an eye on.

As the number of new university studentsreaches record levels, you might think thatinvesting in property aimed at studentsis a no-brainer.After all, the demand isclearly there, and you might also makea decent capital gain if property pricescontinue to rise. However, investing instudent property is actually quite risky.

One popular scheme involves buyingfractional ownership' in a development.You pay around £50,000 to a developerand in return you get a pod' in a studentblock with a short-term rental guarantee.Under this arrangement, a managementcompany takes care of letting the podsand the day-to-day running of thedevelopment, in return for a fee.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri