Student Rental Market

15 Replies

Any investors buying properties in college towns with large universities right now? Curious to explore this space but a little concerned with the future of COVID-related online education and attendance at college campuses. Looking for some advice! Thanks in advance!

One of my students just bought one on the campus of WVU.  The big question here is how locked down is your state and how open is the campus. Some campus neighborhoods are full of students and others are ghost towns, with all of the students going to school remotely.  In either case, you might be able to catch a bargain. In the towns with no students, there will be landlords who are hurting. If you can afford to go negative cash flow for a while, you might be able to steal a deal. In the areas, where you students are back, there will be landlords who lost all of their spring and summer rent, who can't afford to hold onto their properties, or who are just too scared to stay in the student rental space. I have never been good at predicting the future, but I suspect that student rental will make a comeback in the next year or so. 

I have been in the student rental business for 15 years in a SUNY town. You have to have a good lease and have clauses on the lease. We have 99% occupancy. One student didn't show this year out of 150 students we have. We deal with year round rentals and commercial as well. The students should be your easiest to keep the rent if something like this occurs. They always have a choice to stay in the dorms. I make that clear.. They are signing a legal document and making a choice to live off campus which entails paying rent whether the school is in session or not. I was extremely stressed out that the students weren't going to come back or they were going to try and get out of their lease but they didn't. I did have a few that sublet their lease. (we charge a fee for that per semester) (We charge our rent per semester as well) Most of these students do not want to stay home even if they are doing classes online. If they have an apartment they want to be there! Believe me.... They want to be with their friends and away from their parents....lol

It depends on where you are.  Where I am (Canada) universities are online again in the spring and there are lots of vacancies.  There are also quite a few people who have their places up for sale.  I wouldn't buy any student rentals until you know classes will be in person.

I have about 150 students that rent from me every year and I realize this is anecdotal but I think the student rental armageddon that is being predicted is far from reality. At least in my market in South Carolina.  

I'm at 100% occupied and 100% rent paid from my students in 2020. We're also getting the earliest requests we've ever gotten for pre-leasing for the 2021-2022 school year. We're actually signing our first lease this afternoon for a June 2021 start date.

My experience is that college kids 1) desperately want to be on among their friends 2) hate living with their parents. Regardless of whether school is online or not, it will occur and kids would much rather be around their friends than in mom or dad's basement. 

I'd be curious to see market trends around student housing right now. If Covid had hit when I was in college, I still wouldn't have moved back to my dad's house. It wasn't my house anymore. I had moved out. Everything I owned was in my apartment. My job was in my college town. Are students really just dropping everything and going back to their parents' houses?

It depends on the market, (thanks Cpt. obvious), I think smaller private schools will fare better, rich(er) parents.  Kids don't want to be home, they want to be with their friends as Will said.  I'm also on the alumni board of a fraternity, at a CSU, families tend to be middle class. We are renting rooms to non-fraternity students, demand is pretty high, the dorms are closed and kids want to live near campus. It's a very expensive market and the fraternity is very cheap by comparison to other private housing. 

@Brandon Svitak We have numerous clients that are college landlords. They seem set for this school year, but next year is their biggest concern. Not knowing if classes will be virtual or not will see a big impact on their occupancy rate going forward. 

@Will Gaston Where do you advertise your student rentals? Are you able to only accept student applications? How to state in your ad that it's not co-ed like you can only accept female or male at the moment without the discrimination concerns?

Thanks

Nina 

I don’t think we will see the mass exodus that was feared. I have seen a very strong market in student housing locally. If you are near a major university and perhaps some community colleges I think you will be fine. You could potentially market to starter families as well depending on your location and the set up of the properties.

I own Student Rentals here in Toledo, and we have been 100% full for this school year. Obviously Toledo isn't a small college town, but we had everyone show up this fall to move in despite enrollment being down. My feedback from the students is that they want the college experience (as best it can be these days) and to not be home with Mom and Dad. I myself am always looking to expand my portfolio around the University of Toledo, because worst case scenario if UT has major difficulties in the post-Covid world, I simply rent to regular residents at slightly less rent for a bit. That's one thing to consider if you're looking for Student Housing, is buying in a city with that backup option. 

@Nina Ning We advertise on Zillow and 99.9999% of the inquires I get are from students. The price, location, and product determine what type of leads that I get. Nobody other than students will want to pay $5,000/month for a 6 Bedroom duplex two blocks from 30 bars. 

This thread may provide more context: Nearing 1,000 College Students: Here's What I've Learned

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