1. Steady Demand
2. Potential High Returns
Investing in student housing can offer the potential for higher returns compared to traditional residential real estate. With multiple tenants occupying a single housing unit, rental income per square foot can be maximized, leading to increased cash flow and potential profitability.
With by-the-bed lease contracts, student housing properties are often designed to accommodate multiple students in a shared space. Apartments or houses with several bedrooms typically yield a higher lease per unit than conventional multifamily properties.
3. Resilience in Economic Downturns
Investing in student housing allows for long-term investment opportunities. As universities and educational institutions typically have long-term growth prospects coupled with a longstanding purpose-built housing supply shortage, the demand for student housing remains relatively stable. These characteristics can provide a measure of protection during economic uncertainty.
4. Predictable Rental Cycles
5. Geographical Diversification
Investing in student housing across different educational institutions and regions can provide geographic diversification to an investment portfolio, reducing risk associated with localized market fluctuations.
Additionally, purpose-built student housing benefits from proximity to the long-standing economic anchor of a university. This makes student housing significantly less susceptible to variances in job markets and employment trends than conventional multifamily assets.
6. Close Proximity to University
In many cases, student housing properties are located close to universities or colleges. As a result, real estate firms can charge a premium for the convenience and proximity to campus.
Students are often willing to pay a higher rent to live closer to their educational institutions, which can lead to increased rental income and potentially higher returns.