Investing in student housing

4 Replies

Hi,

Anyone with student housing experience? I was hoping to invest in student housing (both single family and multifamily) but I'm concerned with over saturation in the area. There seems to be quite a few rentals available around the University already, and it's in the middle of the school year. Additionally, there's a large apartment complex being built close by as well. Any advice on this? Should I change directions? If so, who is your target resident for renters? Do you like renting to young professionals or families, or do you have no preference?

Hello, student housing is Great. I would first focus on public universities with at least 20k students at a min. Then see if the market a drivers market or more via transit. Try to be within 1 mile of the university. You can rent by the room and have the property furnished. I would make sure you have very very fast internet at the property. Make sure parents are on the lease. I would try to focus on townhomes or multifamily.

The issue with student housing you have only 1 time period to rent. You should focus on renewing tenants very early. Also, if you miss the window you are now in serious trouble. I would go ahead and shop 10 competitors. I would get the monthly rate, sq. footage, what is included in the rent, how far from the school, year built, and amenities. Then figure out what is that rent. Lets say that rent is $450. I would then see can you rent your property at $400 to $410 and make the returns you want. 

Hi @Tee Grange - I am also looking at a few student housing deals. There are a lot positives. This report just came out which could be helpful in providing some additional insights:

https://www.multifamilyexecutive.com/news/nmhc-releases-student-housing-report_o?utm_source=newsletter&utm_content=Article&utm_medium=email&utm_campaign=MFE_021320&

I think now is the time you would see a lot of available rentals so I wouldn't necessarily be discouraged by that but as stated in some previous posts, the lease up period is critical. You should have most of your leases signed in March/April for the upcoming school year and if you miss that window it could be tough. And it's also important to look at the enrollment rate, proximity to the school, and bedroom/bathroom parity (it's easier to rent 1/1).