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Student Housing: A Great Niche Real Estate Investment

February 4th, 2007 • Related • Filed Under

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Student_housing Investing in real estate is always interesting and can sometimes be rewarding, but investing in student housing can be a full contact sport. And like all full contact sports, it can also be very rewarding.

Student housing is a niche market in the real estate investment world. There is a high demand for it, and that demand will continue to grow in the coming years. Quality of the housing does not have to be the best to get rents that are above average, but the landlord also has to take on additional expenses. College students tend to be much more transient, rents are harder to collect, and students tend to wear out properties much more quickly than renters past the party years.

However, all that being said, the market for student rentals tends to be recession proof as a college education is never going out of style. If you are looking to invest in student housing, the following article from the Los Angeles Times will be helpful.

According to the National Center for Education Statistics, college enrollment will grow by 11% between 2003 and 2013. Higher education is less affected by economic trends. When times are bad, more people seek a college degree to improve the job prospects; when times are good, a sheepskin becomes even more important. Moreover, children of the baby boom generation are taking longer than their predecessors to graduate, so they need housing for a longer stretch.

Next, toss in the fact that rents for student-housing properties have been rising at a higher rate than at conventional apartments, according to the National Multi-Housing Council, and you have the makings for what savvy real estate investors call a “good niche opportunity.”

via Los Angeles Times.

There Are 9 Responses So Far. »

Comment by Real Estate Guide 101 on 6 February 2007:

Hi Tom,

An interesting post on investing in Student Housing and the article on Student Housing in LAtimes is informative. As the article discuss about the facts like how one has to face problems, how this investing is profitable for the investor, the way student house rents increasing and helpful guidelines to the new investors. Thanks for sharing
Comment by Celina Jones, Real Estate Consultant on 6 February 2007:

This is an interesting post and was quite informative.

Thanks for Sharing.
Comment by Ashley on 26 February 2007:

As a college student and someone interested in real estate this article brings about some contradicting ideas for me. “Quality of the housing does not have to be the best to get rents that are above average”, but is it not true that with the increasing demand and hence supply of off-campus student housing there will need to be either an increase the quality, a decrease the price, or both? The article states that “children of the baby boom generation are taking longer than their predecessors to graduate, so they need housing for a longer stretch” and with this increasingly educated market it seems it would be beneficial to create housing that attracts a more mature audience. This could include more expensive housing which includes more quality options. What about catering to the customer in order to run a successful business? I argue that though it may seem like quality is of little importance to college students, times are beginning to change. Expect that the current expense of getting into the niche market will only increase as the average college student becomes more real estate savvy.
Comment by Sunil on 12 March 2007:

I know many people have retired on college housing rental real estate. If you can find affordably priced areas I would love to hear about it. Thanks for the article, I wish you had spent more time on identifying college towns that make sense to invest in.
Comment by Mike Gonzales on 3 April 2007:

Hello, I would to let everybody know that my company specializes in student housing, if you are a attending a University across town or across America at http://www.MascotStudentHousing.com
Comment by JP on 18 April 2007:

This is a great business indeed but as a pro doing it full time, let me be very lucid here: this is not, I repeat not for everyone. I have seen some owners just get crushed in this business because they are either too weak or put in the first students that came along and then ate them up alive shortly thereafter.
Pingback by Off Campus Housing - More Reasons Why It May Be A Good Investment — The Real Estate Bloggers on 24 June 2007:

[…] this month we talked about the benefits of buying into the student housing market, and now Marketplace has an interview on the benefits of owning off campus housing as a investor […]
Pingback by The smart and gutsy invest in student housing - Real Estate News - Banks.com on 16 October 2007:

[…] The drawbacks to managing student housing: Rents can be harder to collect, students tend to be very transient and property wear and tear tends to be higher. […]
Comment by Steve on 11 November 2007:

Can anyone help…need detials on the LA times article? I cannot locate it in there archives.

Thanks in advance Steve