The space miracle: 5-person student shared apartment as an investment

There is a glaring one in Budapest Lack of housing for students, which, according to the city's assessment, will increase in the coming years will get even worse, because the necessary new construction projects are missing. With around 120,000 students, this particularly affects the slightly over 20,000 foreign students for whom it is not possible to stay with friends or relatives in the capital. And this is exactly where we come in, more precisely: with the approximately 3,000 German students who are primarily studying medicine here.

“Are the students destroying my beautiful apartment?”

We are dealing with a target group for whom the rental price is not as important as the location and furnishings of the apartment. On the one hand, this leads to higher achievable rents, but on the other hand, we have also found that these tenants treat both the room and the common area very carefully and therefore maintenance costs are minimal.

Some of our customers can't believe this at first. We often hear the sentence “When I think back to myself as a student, I wouldn’t have taken myself as a tenant” 😀

Luckily we had different experiences here.

When we select such an apartment for our customers, several factors are important:

• Security (location)
• Proximity to the universities (location)
• Immediate proximity to metro and S-Bahn stations (.. and again location)
• Sufficient bathrooms / toilets (equipment)
• Layout of the apartment (number of rentable rooms)

The last point is particularly interesting, as we see in the following floor plan:

Optimize floor plan: How 3 rentable rooms became 5

The original structure was a huge living room, 2 bedrooms, a storage room and a closet off the kitchen. By dividing the living room with a partition (which can also be removed), a common area was created behind the new room 1 and the separate access to the former bedroom meant that room 2 was now also available. The storage room next to the kitchen became another room, and even the storage room could be converted into a small but cozy room.

Ideally, 5-person shared apartments have 2 bathrooms and 2 separate toilets. The residents can negotiate for themselves whether, for example, it is used separately according to gender, or whether it is simply a matter of never having to wait for anyone when you need to take a shower.

The conversion to 5 rentable rooms increases income by around 300 euros per room per month. An interesting side effect concerns possible defaults - if a tenant defaults or no new tenant can be found for a room for a few weeks, income will decrease slightly, but the apartment will continue to generate positive cash flow.

Student shared apartment as an investment:
Which shared apartment size is optimal?

We have found that there is a point at which shared apartments become impersonal, where communication comes to a standstill, and where the individual's sense of responsibility and sense of community diminishes so much that the apartment falls into disrepair relatively quickly.

This can often be observed in shared apartments with 6 or more people, which is why we have drawn the limit at 5. And we have actually noticed that some people consciously look for shared apartments with 3 to 5 people because they can be more diverse and therefore more interesting.

Since we don't want to leave anything to chance, we send a cleaning team to the apartments every two weeks. This allows us to keep an eye on the condition of the common areas and at the same time defuse an important stress factor in shared apartments: Who cleans the bathroom and kitchen, and if so, how carefully?

Why is a student shared apartment worth investing in?

Renting to students brings numerous advantages and minimizes risks.

1. We buy larger apartments from 100 square meters and benefit from the cheaper price per square meter - this also means greater potential value development. It is fitting that the most attractive locations for students are all rather inexpensive “B” locations.
2. A complete renovation is usually not necessary or can be postponed indefinitely (e.g. until the time of sale). The floor e.g. We basically wouldn't touch it at all.
3. Furnishing and equipment can be provided comparatively cheaply, so it's no big deal if something breaks
4. Renting furnished rooms with temporary contracts avoids the numerous problems and restrictions of long-term rentals, which could also have a negative impact on the sales price if you ever want to sell them.
5. If partition walls are used, this can easily be reversed later. So you would again have an apartment with large rooms, e.g. can be attractive for owner-occupiers. Due to the current tendency to divide up living space, it may even be the case that large apartments, which are then very rare, will become more expensive again. 

If you are interested in a project like this and can imagine realizing something like this with us, please feel free to contact us meet us online or here on site.