Student housing investment can be a great source of income. There are many different ways to profit from student property investment indirectly. You can purchase shares in real estate groups and trusts or contribute to a student housing project.
However, you could potentially earn even higher returns with a more direct student property investment. Starting your own student housing business allows you to set your own rates and earn a consistent rental income.
Unsure of where to start? Read on and learn how to start a successful student housing business.
Student housing, as the name implies, provides students with accommodation. Therefore, a student housing business is any business that involves student accommodation. This can be short- or long-term accommodation. And like other properties, it can also be budget-friendly or high-end.
There are also different types of student housing to consider.
Student housing is not restricted to any particular building type. It can be a dorm, with multiple students sharing sleeping quarters. It can also be a freestanding house that a few students share, or an apartment building. An important factor is whether the student accommodation is on or off-campus.
Most on-campus housing is of the residence hall variety, although some campuses offer other housing options. They may include a few single rooms for students, but they usually maximize space with shared dorm rooms. The kitchen, bathroom, dining, and recreational facilities are typically communal.
On-campus housing makes life easier for students as it is conveniently located near their lecture halls and other college facilities.
Before you consider starting a student housing business on campus, contact the relevant campus authorities. They may have policies in place that affect student housing construction.
Off-campus housing is usually still near campuses and is usually purpose-built student accommodation (PBSA) with single and/or shared accommodation units. Purpose-built student accommodation (PBSA) is designed specifically with students’ needs in mind.
Off-campus housing offers students more independence and freedom, but also often includes amenities like communal recreational areas, laundry facilities, gyms, etc.
Because it is off-campus, you won’t have as much red tape to deal with when choosing the site or the property type. However, it should still provide students with easy access to campus.
Starting a student accommodation business can appeal in different ways. Think about what you can afford and what you want to achieve with your student accommodation business.
You may be looking for a large-scale, full-time business opportunity with plans to expand in the future. Or you might want a small student property business that will earn you a reliable side income or passive income for your retirement years strategy.
Starting a student housing business can offer you all of these opportunities. Why student housing, you ask? If you’re still on the fence about starting a student housing business, here are three good reasons to consider it.
Compared to other types of property investment, student housing always wins. This is because of the consistent demand for student housing, despite any property market shifts. While other asset classes can fall out of favor, student housing shows a stable demand.
Demand is only one side of the coin. Supply and demand must align. This calls for an understanding of student property market supply/demand dynamics.
To make the most of that high demand for student properties, you must choose a location where the supply falls short of demand. If you do this, your housing business will find a wealth of students looking for accommodation.
People are often hesitant to start a rental property business because of how volatile the property market can be. This is understandable. Economic challenges affect affordability after all, and that can minimize the potential tenant pool.
This is why investment in a student housing business is usually a much safer bet. The student housing market is known to be more resilient to economic downturns and market shifts than other types of investment.
That said, affordability may still be an issue for students who come from lower-income households. Keep this in mind when you’re deciding on your facilities and rental rates.
Simply put, investing in student housing will offer you higher potential returns than most traditional real estate investments.
It’s time to secure your first property and turn it into a profitable student housing business. From construction and development to refurbishment and management, following these steps will ensure your investment in student housing is successful.
Don’t rely on vague information in a generic news article, website, or student housing business magazine. Do your own detailed market research. And find a platform that offers the student housing market data and insights you need, like College House.
You’ll get up-to-date student housing data for the area and type of student housing you have in mind.
Like any other property sector, student housing is subject to regional and leasing trends. You’ll need this information if you need financing to purchase a property for your student accommodation business. With the right data on hand, lenders will be more likely to extend you a loan.
Choose a suitable property for the type of student accommodation you want to offer. Select a property that already has the basic infrastructure in place for the amenities you want to offer students.
You can repurpose a building, but if you choose wisely, you’ll reduce the costs of converting it into student housing. For example, a property originally designed as self-catering holiday accommodation will already have many of the facilities in place for purpose-built student housing units.
Before choosing a property and making any structural changes, we recommend that you have a look at our guide to innovative student housing designs.
Investigate what today’s students look for in student housing.
Students look for accommodation that offers extra value, such as high-speed internet or retail and recreational facilities nearby. Our research has shown that smart connectivity and sustainability are trends that will continue to play a role in the future.
By offering the types of facilities students want, you can charge more and thus earn a higher rental income.
Location is just as important as property type. Student tenants aren’t just looking for a place to stay while they pursue higher education at a college or university. They are looking for safety, security, comfort, and convenience.
If the campus is within walking distance, ensure the property is in a safe area. If it is not, it must be close to transport hubs. This will make your student accommodation more desirable, which makes it a better investment.
It’s time to start your student accommodation business. Before you can start accommodating any students, you’ll need to invest in advertising/marketing to attract those potential student renters.
If you don’t know how to do this, don’t worry. We have compiled our most effective strategies for marketing student housing to help you. Alternatively, consult a real estate management service that offers property marketing services.
The way you market your business will depend on the type of property it is and the type of tenant you wish to attract. Remember to mention any extra amenities that will appeal to students. This will help you to stand out from any other student properties in the area.
Managing a property business, even a small one, can be a lot of work. Property management software will make running your student housing business a whole lot easier.
If you don’t want to manage the business yourself, hire a property management service to do it for you. They can manage tenant screening, property inspections, maintenance, repairs, and rental payments. Many property managers also handle property marketing and other services.
Starting a student housing business can be a lucrative decision. To ensure success, you must research, choose the right location and property type, and manage it effectively. Likewise, investing in a student housing business can deliver good returns, but only if you choose one that aligns with demand.
Either way, you need up-to-date student property market data and insights into student housing trends. College House can help. We offer student property developers, owners, managers, and investors the data analytics, market reports, and insights they need.
Book your demo today.
