Student housing projects has magnetized a lot of attention over the years, and has emerged as a resilient asset class with the ability to drive returns during a depressed macro-economic environment. The occupancy figures and rent growth in this sector has outperformed traditional multi-family apartments in many situations, including the recent great recession. This has made student housing projects a popular investment option for savvy developers of today. Properties developed and managed by reliable companies like Nelson Partners would particularly be ideal for investing in.
Investors and developers who see a strong future in the student housing space are ideally bolstered by the demand trends for higher education in the United States, as well as the risk profile of the tenants. There are more than twenty million students enrolled in a college or university in the U.S, and the numbers keep climbing up every year. The number of international students arriving to the country to obtain bachelors’ and advanced degrees particularly keeps increasing. These factors, along with the funding issues some institutions face in terms of expanding on-campus facilities had subsequently created opportunities for private off-campus property to cater to the rapidly growing student housing demand. The growing enrollments support a relatively stable supply of potential tenants for the landlords of student housing facilities. The common practice of needing the parents of the students to cosign the lease agreements also plays a role in elevating the attractiveness of the tenant base.
In the right market, a property of the same size can be rented out to students at a much higher price than to a family or other individuals. This is largely because college students are likely to pay a good sum of rent to be near their campus, whereas families are usually less specific about the location. Moreover, student housing rent is largely based off the number of bedrooms at a space, rather than the overall size of the apartment. It often is not too hard to add bedrooms to an apartment to increase the number of students the space can be rented out to. People intending to invest in student housing should try to find a market that is not oversaturated. They need to conduct proper research on the vacancy rates at a region, prior to making any investment. They also need to explore apartment and home prices in the area. It additionally is always better to invest in a property that has been developed by a well-established company like Nelson Partners. Detailed insights into the company can be found at their website.
Student housing projects have a built-in tenant base, which invariably makes marketing a lot easier. There additionally are student loans available that help these tenants to pay off their rents. One of the key reasons why economic occupancy is so high in this sector is that many properties require a co-signer for each student.