Investing in Student Housing: Returns and Taxation

Student Housing: A High-Yield Niche Investment

Belgium has approximately 530,000 students in higher education, with a growing share of international students. This structural demand, combined with often insufficient supply in university cities, makes student housing one of the most profitable real estate investments in the Belgian market, with gross yields ranging from 5 to 8%.

However, investing in student housing is not as straightforward as buying a standard apartment. Regulations are specific, management is more intensive, and the risks are different. Here is a complete guide to making your investment a success.

University Cities: Where to Invest?

Louvain-la-Neuve: The Safe Bet

A 100% university city, Louvain-la-Neuve hosts UCLouvain and its 33,000 students. Demand for rooms structurally exceeds supply. It is the safest market but also the most expensive.

• Purchase price for a room: 120,000 to 180,000 euros
• Monthly rent: 450 to 650 euros including charges
• Gross yield: 5 to 6%
• Occupancy rate: very high (95%+), virtually no vacancy

Leuven: The Premium Flemish Market

KU Leuven is Belgium's largest university with 65,000 students. The student room market in Leuven is very tight, with strong international demand.

• Purchase price: 150,000 to 220,000 euros
• Monthly rent: 500 to 700 euros
• Gross yield: 4.5 to 5.5%
• Note: strict city regulations on room quality (fire safety standards, minimum floor area)

Ghent: The Dynamic Market

UGent and Hogeschool Gent together have over 70,000 students. Ghent is a hugely popular student city for its cultural life and nightlife.

• Purchase price: 130,000 to 200,000 euros
• Monthly rent: 450 to 650 euros
• Gross yield: 5 to 6%
• The student area around Overpoort and near the Citadel Park are the most sought-after zones

Liege: The Best Returns

ULiege and HELMo welcome approximately 30,000 students. Liege offers the highest returns thanks to low purchase prices.

• Purchase price: 80,000 to 130,000 euros
• Monthly rent: 400 to 550 euros
• Gross yield: 6 to 8%
• The Sart-Tilman (campus) and city centre (Guillemins area) are the priority zones

Namur: The Middle Ground

UNamur and the Provincial Higher Education welcome 15,000 students in a manageable-sized city.

• Purchase price: 100,000 to 160,000 euros
• Monthly rent: 400 to 550 euros
• Gross yield: 5 to 7%

What Type of Student Room to Buy?

Individual Room in a Building

The most common format: an individual room with shared facilities in a student building. Lowest price, simplest management if you buy a unit in an existing complex.

Student Studio

A complete studio with kitchenette and private bathroom. More expensive to buy but higher rent and very strong demand, particularly from international students and PhD candidates.

Entire Multi-Unit Building

Buying an entire building (4 to 10 rooms) offers the best returns but requires a larger investment (400,000 to 800,000 euros) and more intensive management. The advantage: you control the entire building.

Taxation of Student Housing Investment

Rental Income

In Belgium, rental income from furnished properties (which most student rooms are) is taxed in a mixed manner:

• Property portion (typically 60%): taxed based on the indexed cadastral income x 1.40, at the marginal rate (25 to 50%)
• Movable portion (typically 40%, for furniture): flat-taxed at 30% after deduction of 50% flat-rate expenses, giving an effective rate of 15% on the movable portion

This split is a significant tax advantage compared to standard unfurnished rental. See our article on rental investment taxation for details.

Registration Fees

• Flanders: 12% (no reduced rate as it is not own residence)
• Wallonia and Brussels: 12.5%

Student Housing Regulations

Each region has its own standards for student rooms:

In Wallonia

• Rental permit mandatory (issued by the municipality after inspection)
• Minimum room area: 12 m2
• Strict fire safety standards (smoke detectors, extinguishers, evacuation plan)
• Mandatory ventilation and natural light

In Flanders

• Conformity certificate mandatory
• Minimum area: 12 m2
• Enhanced safety and comfort standards (minimum sound insulation, individual heating)
• Regular municipal inspections

Rental Management: The Specifics

The Student Lease

The student lease is a specific contract in Belgium (maximum 1 year, renewable). It offers more flexibility than the standard 9-year lease, for both owner and student. The notice period is 2 months for the student.

Turnover and Off-Peak Periods

The main challenge is annual turnover. Each year, some students leave their rooms (graduation, city change). The vacancy period is typically July-August. Budget 1.5 to 2 months of vacancy per year in your yield calculation.

Pitfalls to Avoid

• Developers with "guaranteed yields": be wary of too-good yields (8-10% guaranteed). Check that the purchase price is not inflated.
• Location outside the student zone: a room more than 15 minutes' walk from the university or a public transport stop will be hard to rent.
• Safety standards: bringing an older building into compliance can cost 10,000 to 30,000 euros (fire safety, electrics).
• Competition from new residences: new student residences with amenities (gym, co-working) attract wealthy and international students.

Return Calculation: Worked Example

A room in Liege purchased for 100,000 euros:

• Acquisition costs (12.5% + notary): 15,000 euros → total cost: 115,000 euros
• Monthly rent: 480 euros x 10.5 months (1.5 months vacancy) = 5,040 euros/year
• Annual charges: property tax (600) + insurance (200) + maintenance (1,000) + management (500) = 2,300 euros
• Net income: 5,040 - 2,300 = 2,740 euros/year
• Net yield: 2,740 / 115,000 = 2.38%
• Gross yield: 5,760 / 100,000 = 5.76%

For a more detailed calculation including leverage and capital appreciation, use our return calculation guide.

Conclusion: Who Is This Investment For?

Student housing investment suits investors who:

• Seek above-average returns (5-8% gross vs 3-5% for a standard apartment)
• Accept more active management (annual turnover, regular maintenance)
• Have a moderate entry budget (from 80,000 euros)
• Invest in a university city with strong structural demand

To compare prices in university cities, explore our data per municipality.