Student Housing Provides Its Own Challenges
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If you are looking to invest in housing near college or university campuses, especially multifamily units, there is a very interesting article over at Multi-Housing News that analyzes the benefits and challenges that you would face. The demographics of college enrollment and childbirth are showing that there will continue to be increasing enrollment in universities and housing shortages will continue to occur.
So opportunities to make a significant income are to be held renting to college age students. However, and it is a big however, the market should not be entered unless you know how to deal with it. If done wrong renting to college students can be a nightmare. So read this excerpt and then the whole article to see the potential of the lucrative student housing market.
But while payroll stability is an advantage in that the apartment is not vulnerable to constant economic fluctuations, it can also mean the owner is locked into a low occupancy rate in bad times. “Once the rent roll is established in August, there is not much you can do to change that for the rest of the year. If the occupancy is 98 percent, that is great. But if it ends up being 78 percent, there is not much you can do until next summer,” notes Blevins.
Apartment companies can also be caught off guard by the multitude of management practices particular to this market segment. “Everyone is moving in the same day and moving out the same day. You are turning over 75 percent of the community every year,” says JPI’s Montgomery. “This creates timing issues of manpower. It’s a unique and specialized management that’s required to deliver the roll offs,” adds Blevins. Other management practices that may catch apartment managers unaware, says Blevins, include seven-days-a-week trash pickups prior to the move-out period, and the employment of specialized products or services such as moving dollies. via Multi-Housing News.
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Comment by Bert Gervais on 28 March 2008:
This is interesting point about the stability of student renters. One thing to keep in mind is that parents usually pay the rent, which can be a good thing, however do observe the parental relationship, because if the rebellious student falls out with the parent, and says to him “you’re on your own kid”, they you have a renter who without the parental financial support simply can’t pay your rent.
Bert is an advisor at http://www.placefinder.com a website that helps students find off-campus housing , roommates and sublets.