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Investing into an education township is attractive and possible

YOLO

Investing into an education township is attractive and possible

My personal experience with education township

I graduated in July 1998. Yes, now you know my generation is known as the Gen-X. It was in 1994 that I started that I enrolled in Inti Subang Jaya for my degree. At the time, all the colleges in Subang Jaya or Bandar Sunway does not have the attractiveness of today. In fact most of them do not even have University status! They are merely colleges and they could not even grant degrees at the end of the studies.

The students would have to transfer to a partner university. The number of students were however increasing even then and one could see this from the many student accommodation advertisements everywhere. At the time, I paid RM250 to stay in a small room and I shared it with two other friends who also paid RM250 per month. Yeah, the owner gets RM750 per month just from that one converted room in their landed home. It’s not the only one… 😛

Student population in education township

I have friends from all over Malaysia and even I came from Ipoh. It was also at this time that I met my wife who was then a student from Sabah. I stayed in one of those converted landed homes and I shared a room with two other friends. Needless to say, those years passed very quickly and I would then moved on to Bristol, UK to complete my degree.

After graduation, many of these students would be working in the Klang Valley and because they are familiar with the area, they may choose to continue staying in Bandar Sunway and its neighbourhood or even purchase a property there too. Please note that when one is familiar with the place, the chance to continue staying there is far higher.

Image courtesy of OCR

The evergreen status of higher education

I will prepare funds for my children to complete their first degrees. I have spoken to many parents who have the same thoughts. In fact, these days it’s a huge disadvantage if one were to start working without a degree. The reason is a simple one. When more people have it, then the people without the qualification will be left behind. This is why tertiary education as an industry will continue to grow for the foreseeable future. Median age of Malaysians is 29 or 30 years old currently.

One major catalyst for townships would be students

In 2002, I started my Master in Business Administration under UUM, Malaysia. It was then that I have gone to Sintok in Kedah for the very first time. There were hardly any shops along the way but when I graduated, there were so many newly built shops and Sintok is definitely a thriving education township even though it was in the middle of nowhere when it started.

Businesses are thriving and the demand for goods and services from just the student population alone could move the local economy.

Image courtesy of OCR

Bandar Sunway is in the Klang Valley

When parents are deciding where to send their children for tertiary education, one obvious choice would be Bandar Sunway. Within the neighbourhood, there are INTI International University, Taylors University, Sunway University, The One Academy, Monash University, SEGI University and many more. This is one reason why it’s a melting pot of students from all over Malaysia. As they say, somehow people just love to go to places where everyone loves to go. Thus, the attractiveness of an education township would keep growing. Well, except for the past 2 years due to Covid-19. However, with all the lockdowns lifted, do try to go to Sunway mall during the weekends of after study hours and you will understand what I mean.

When businesses thrive in an education township

Within a thriving education township, many businesses would also thrive. This is also why it’s a place where finding a shop to rent to start a business is tougher and this is also why it’s always a lively place no matter when we drop by. In fact the accommodation scene is no longer just limited to the converted landed homes and it’s definitely not just one or two of the more contemporary high-rise homes with facilities today. Today, it’s a big industry when it comes to accommodation and it’s also where many property investors may have invested as well.

Image courtesy of OCR

Accommodation as a long term property investment?

We can see clearly that whether it’s back to 1998 or even today, when it comes to student accommodation, it’s always an attractive proposition.  Just remember though that it’s not just buy and forget yeah. Property investment needs time. Time to understand, time to do research, time to view the property, time to get the place ready, time to scout for tenants, time to clean up after the tenant has moved out etc.  This is why it’s important to buy into an area which is already thriving versus another which would need even more effort to secure a tenant.

Here are some statistics of the current rental price for selected institutions within and around Bandar Sunway. This rental projection is based on current available information and provided by OCR’s own research.

Click here for more information on YOLO

Importance of a tertiary education and accommodation for these students will continue growing

From the 90s when I was a student in a college to today when I am in my 40s and another 10 years when my children will be in a university, the importance of tertiary education will not diminish. With the world becoming even more competitive, a basic degree may become the minimum requirement in the future. When more students are in tertiary institutions, the demand for accommodation will continue to grow.

Let’s be realistic on one thing though. Renting to students may not provide a quick road to untold riches. However renting to students would provide a smooth road towards continuous and stable returns. It’s just another option which one could consider. Happy deciding.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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