Nelson Partners Marks the Key Student Housing Differentiators to Consider When Investing in Such Properties

Investors looking for consistent and stable returns usually find college communities a smart place to put down their funds. This is particularly true as college enrollment continues to rise. As increasing number of Generation Z head off to colleges, a rapidly growing number of investors get the opportunity to enjoy low vacancy levels and consistent returns from student housing rentals. While property performance varies greatly by location, posh purpose build student housing projects developed by companies like Nelson Partners usually manage to fetch a consistent, commendable return.

One must note that all student housing projects are not equal. It is important for investors to take into consideration the market dynamics and risk/return profiles of any project before investing their funds. Here are four major elements they need to keep in mind:

  • Supply/demand: Investors need to firstly research on approximately what percent of students live on the campus near the property they are looking forward to investing in. Whether or not there is enough housing nearby the college or university to support the demand for off campus housing should also be ascertained. All of these elements will vary significantly based on the location. There are some college towns may have zoning laws that restricts the supply of new units. Another factor to take into account is that multiple dormitories are not getting less crowded due to the aovid-19 pandemic concerns, which subsequently increases the demand for off campus housing.
  • Public vs. private universities: The year-over-year pre-lease occupancy growth is driven majorly by large public universities. This indicates a string demand among more affordable universities that offers in-state tuition.
  • Proximity to campus: majority of undergraduate students want to live close to the campus, usually not more than 0.25 – 0.5 miles away. If a property is within the walking distance of the campus and the social life of the students, it invariably shall have a major competitive advantage. Alternatively, many students might still be interested in certain properties if it is located near a direct shuttle service or accessible transportation that they can take alongside their peers.
  • Pre-furnished units:  The move-in day will be a lot less stressful for the students if they do not have to worry about buying furniture. After all, student housing is transient. Students will leave and want to purchase furniture later when they settle down at a more permanent home.

On the whole, student housing can be quite a sound investment, particularly as the top universities of the country continue to grow their enrollment. Students will always need housing, and hence the demand in this sector is unlikely to go down any time soon. To explore the best invest opportunities in this sector, people can always contact companies like Nelson Partners. It is a nationally recognized real estate investment firm. They specialize in developing, acquiring and managing high quality purpose-built off-campus student housing properties.