Home » Real Estate Trends » Students hostels – a sensible investment, huh?
You may think that owning property near an educational institute is not a fine idea, but it is a potential goldmine of excellent rentals if you convert the premises into a students’ hostel. Though it is illegal to conduct commercial activities in residential areas, various hostels are operational in domestic zones, and their apparent look may not even give a slight idea of whether it’s a student hostel or just another home in the lane. This tactic may not work in societies like DHA, Bahria Town or other cooperative residential communities, which are strict about their policies.
The legal status of running students hostels in residential areas aside, the fact that these hostels are a source of massive and stress-free earning cannot be denied. In big cities, many people are into the business of running student hostels and charge each student from Rs 3,000 to Rs 10,000 per month, or even more depending on the location of the hostel, its proximity to educational institutes, bus stops and other amenities. Moreover, rental charge in a student accommodation also varies on the basis of the facilities provided, which may include availability of attached bathrooms, Wi-Fi, security, back-up power, and most importantly, food.
Though you need a hefty initial investment to set up a hostel, the return on this investment is likely to be quite delicious. And if you can’t afford to invest, you can simply turn your home into a hostel and find yourself a rental accommodation in the neighborhood. The earning from a hostel is likely to be sufficient to allow you to pay rent for your accommodation and still save a good sum for your bread and butter, and make ends meet easily.
So, what are your views on this aspect of real estate investment? Share your thoughts with us in the comments section below.
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Sir,
Do you have more details about regulation to set up a students hostel? What would be the initial required investment?
Regards
Dear Juned,
I am not yet posted about regulation to set up a students hostel, but i have seen many hostels operating in the residential zones, even in posh areas, like Garden Town.
Secondly, initial investment required depends on the type and size of hostel you wish to set up. A lion’s share of your investment is likely to be utilised on the procurement of premises or house for the hostel.
No. Just no.
Dear Atif Assalam o alaikum,
Why did you say no to this segment of real estate?
Could you give us some figures for setting up a hostel in a small house in Islamabad? (5-8 marlas double storey). How many students can it house without jam packing it and how much higher will the return be as compared to renting out the house. Please also give us some potential areas for this purpose in Islamabad which should be affordable. Thanks
Dear sir, undoubtedly hostel is a very lucrative idea, and there are many hostels in the city going house-full as students from the rural areas and other cities are flocking in Lahore for preparation tests and other academic pursuits, but the legal issues have been ignored. At present no government entity is paying attention, but I fear once you have invested and start earning and one fine day you are surprised to see guys from FBR, Police, Municipality!?!?! Secondly I was wondering how to run a business in a residential property??? Kindly help me overcoming these issues as I also intend to start such a venture.