Student housing is a unique business model. Unlike other rental properties, students usually stay until they graduate. The demand for student housing depends on the college or university, meaning it is not as cyclical as another real estate. Many student housing investments are turnkey, allowing you to get started without putting money into remodeling or home improvements.
Less Risk
Student housing is often a more stable investment than other rental properties. Non-student rentals often have a lot of turnover, which can be expensive and time-consuming. In addition, if the landlord isn’t familiar with the area, they could face challenges in finding tenants and managing the property. Students, on the other hand, tend to stay until they graduate. They also have a consistent income source and can afford to pay rent. It means that investors can have a steady stream of income, which is important for any real estate investor.
David Adelman did his research and worked with a team that understands the college town market. As an investor, you should look at the university’s enrollment trends and how those fluctuations have historically affected the real estate market. Considering the competition and how the property will stand out among other student rentals in the area would be best.
Demand for Student Housing
Student housing can be a profitable real estate investment because it offers high returns and is more flexible than traditional rental properties. This asset class has unique characteristics that investors can capitalize on, including a consistent tenant base and low maintenance requirements. Another thing that makes investing in student housing a good choice is its demand. College enrollment continues to grow each year, even during economic downturns. This demand for higher education and the resulting job prospects help fuel student housing demand. Many student housing properties are pre-furnished, which can make move-in days less stressful for students.
Moreover, students typically have cosigners on their leases (such as parents or teachers) to guarantee their rent payments. It can reduce your risk as a landlord since it’s more likely that the rent will be paid on time. Furthermore, student tenants tend to stay in the property until graduation, generating a consistent rental income stream.
High Yields
Most students only live on campus for four years, and many choose to rent out their off-campus housing. This captive tenant market keeps vacancy rates low and gives landlords high yields. As a bonus, student rental property investments are often structured to allow you to rent out individual rooms rather than the entire apartment. It will enable you to increase your rent and still attract students. One of the best things about investing in student housing is that it’s considered recession-proof. It is because college students are in school for four years, so they will always need accommodation. It is a great option for diversifying their portfolios with real estate investments. However, it’s important to do your research before buying student housing. Another smart move is to work with a reputed real estate investment firm that is knowledgeable about the industry. You can minimize your losses and enhance your gains by doing this.
Low Maintenance
While many skeptics question student housing markets, plenty of investors also see the value in these investment properties. While student renters tend to have high tenant turnover rates due to short-term leases, this can benefit landlords. As students move in and out, they will bring new tenants interested in renting your property. It will allow you to raise your rental rates, which can result in higher profits. The demand for student apartments will likely rise as universities reopen and resume classes. While COVID-19 threw a wrench in everyone’s plans, the economy has reopened, and student housing investments are a viable option for REIs looking to make money! If you want to learn more about investing in student housing, contact a real estate investor advisor. These professionals specialize in portfolio development and can provide detailed insights into this lucrative niche.
