So you’ve been interested in investing in real estate for a while. It seemed simple enough before you started researching it. Then you realized just how involved it gets. There are so many more different types of properties than you thought. It’s not just that there are residential and commercial properties. There are also several types of residential properties! Perhaps you’ve stumbled upon some tip about the current PRS trend, a reference to a type of residential real estate. But what the heck is PRS?
PRS refers to the private rented sector. This may have been the sector you were thinking about when you were thinking about real estate investment. Still, it’s good to get an understanding of what makes this sector different. Looking at PRS from an investment perspective is essential for any budding real estate entrepreneur.
Targeting the right demographic
The average age of a person looking to move into their first home is between 25 and 35. The PRS market tends to cater towards this age group. A lot of the homes that are being built on the open market have three or even four bedrooms. So the demographic there actually ends up being somewhere closer to the 30-40 age group. The people who are younger than that tend to be young, urban professionals. They’re looking for affordable, flexible housing – which PRS provides.
Choosing the right location
Your best bet is in urban locations. Whether you’re overseeing the building of a new project or simply investing in one already standing, it’s best to go urban. A lot of investors are actually putting their money into multi-home buildings. These are becoming extremely popular in urban environments, and allow for a lot of savings if done right. One problem is that many of the one being built now are aimed at the luxury-loving crowd. (Also known as young and rich entrepreneurs!) You’ll have to find a good balance between great location and affordable properties. Remember your demographic!
Making it a home
A lot of investors don’t want to pay too much attention to the “homeliness” of properties in the private rented sector. After all, these projects are built specifically for renting. But you should consider paying attention to developing a sense of place in these properties. You could help this by fostering a feeling of community within multi-home projects. High-quality PRS furniture in the properties will also go a long way. If you’re starting the project from scratch, then make sure it’s located a conveniently close to popular amenities.
Is a PRS project a good investment?
The private rented sector makes up a good bulk of the buy-to-let market. This should tip you off about the potential lucrativity of this venture. A lot of people will say that the open market, where homes are generally sold for full value, sees higher returns. And you should definitely consider the benefits there. But as a long-term investment vehicle, PRS may not necessarily make you less money. As long as you play your cards right, you could be making big profits in the private rented sector.