Student apartments are highly desirable investments because they offer higher yields and shorter void periods. They’re also typically located near universities, cafes, local nightclubs, and workplaces.
Consistently increasing university enrollments can drive demand for off-campus student housing. Look for properties within walking distance of the campus or a short commute away.
Location
The location of campus apartments is important because students often prefer to live close to school. It is easier for them to get to class and socialize with friends if they are nearby. Investing in properties closer to campus can help investors like David Adelman generate higher profits.
College towns are usually vibrant communities with many restaurants, malls, and nightlife. It is also easy to market student housing in these areas because they have a large pool of potential renters.
When choosing a property, students consider price, privacy, and proximity to campus. They also look for amenities such as outdoor space, modern appliances, and smart-home technology, which are in high demand among young people.
Size
Students might seem like a risky tenant demographic, but student housing has become a popular investment choice among multifamily developers and investors. One reason is the stability of rental incomes that student tenants offer, which makes it an appealing option for investors seeking steady cash flows. Another factor is that student enrollments typically increase during economic downturns, boosting demand for student apartments.
However, VCs will still need careful research when investing in student housing. This includes preparing a business plan with detailed financial projections, funding requests, and risk assessments. A well-written business plan can help attract investors and lenders and demonstrate a clear understanding of costs, revenue potential, and profitability. This can help you secure the capital you need for your student housing development business to thrive.
Amenities
Developers who build student apartments want to offer amenities that make life easier. These include laundry rooms, a pool, fitness centers, and study spaces. Students often live away from home for the first time and want to have a place to do their laundry and keep their clothes clean.
Besides these basics, some student apartment communities offer out-of-this-world outdoor amenities to attract new tenants. For instance, some developments have open grassy areas where students can play everything from frisbee to football. They also have cabanas and resort-style sundecks.
These facilities are designed to give students the freedom they need for a balanced college life. They aren’t restrictive like dorms, which can have rules about noise levels and resident advisors.
Leases
Student housing properties offer consistent income as students sign long-term leases. In addition, enrollment rates in universities and colleges remain stable even during economic downturns. This makes them an attractive investment option.
Investors should ensure their property can withstand the wear and tear of renting to students. One way to do this is by securing rent guarantors. This ensures that someone will be held accountable if a student cannot pay their rent.
Additionally, investors should consider incorporating smart technology into the building, as this can help reduce energy use and costs. This can be accomplished by using solar panels and installing motion-sensor lights. This can save the building money and attract future generations of college students.
Financing
A strong business plan highlighting a student housing development’s unique value proposition can provide an excellent opportunity to attract private investors. Depending on location, government programs may also be designed to support student housing development that can open up additional financing opportunities.
Lenders prefer student housing within walking distance of campus or on a major transportation route. They also look for schools with enrollment numbers that are stable or growing, as well as a balanced submarket that isn’t overbuilt.
Students typically pay a portion of their rent, so requiring parental guarantees can help to ensure a steady income stream for student housing investments. In addition, market trends indicate that students are looking for various accommodations to fit their needs.
Arman Ali, respects both business and technology. He enjoys writing about new business and technical developments. He has previously written content for numerous SaaS and IT organizations. He also enjoys reading about emerging technical trends and advances.
