In the multifamily property management industry, student housing has historically not been given the same respect as other apartment communities. However, the “Animal House” image of student housing is starting to fade as college enrollments rise and property managers are raising rents.
Apartment buildings overall have become a favorite investment in real estate these days as new-build projects have ceased to develop and home-ownership is on the decline. “The nation’s first and largest student-housing REIT, American Campus Communities Inc., has posted a return topping 30% in the past 12 months, ending May 31, excluding dividends.”
“Many student-housing operators boast that occupancy is in the high 90% range and expect rent growth of between 2% and 6% this year,” according to Ryan Reid, national director of student housing at brokerage CB Richard Ellis.
Much of these apartments offer students their own room with a shared living space, kitchen, and bathroom. Property management of student housing can be more demanding as you see a high turn-over, potential increase in maintenance requests, and shorter leases. Despite these challenges, the real estate market is experiencing a rise in the student-housing sector.