The student housing market has countless exciting opportunities for investors and developers alike. However, student properties also present some unique challenges. The new approach of bigger is better, can make student housing even more challenging than it has to be.
But don’t be disheartened. With our insights for investors and developers, you will be well-prepared for your adventure into the complexities of student housing.
Student properties are affordable, furnished or semi-furnished accommodations located on or near campuses with a range of amenities that students want and need.
Student accommodations can be units or apartments in a building near a local university or college campus. They can also be dormitory-style student housing complexes on the outskirts of the campuses themselves. The common thread is that they are purpose-built to meet students’ needs.
There are, of course, many practical considerations for daily living. However, student accommodation should also be an extension of student community life. Therefore, it must offer spaces for students to socialize in a safe and supportive environment.
One of the most common features of college and university student life is a sense of community.
Students wish to commune and engage with one another due to their shared interests in higher education and a common bond of young adulthood. This is why fraternity and sorority houses hold so much appeal.
Even in cases where living in their parental home is possible, many students prefer campus housing. This is because purpose-built student property meets their desire for newfound independence, providing a safe environment in which students can live, study, and socialize.
Our research shows that the student housing market has been experiencing a rise in rental rates. The national average pre-lease rate stands at 31.6%, although there are large regional differences, as noted in our October report. The Midwest, for example, showed a pre-lease rate of 36.1%
The demand for high-quality student property near major universities remains strong. This is especially true for urban developments offering premium amenities.
Current student housing market trends show that student properties in urban environments show the highest demand. That said, suburban and rural markets, although showing slower growth, continue to be in stable demand. There is also significant interest in eco-friendly and tech-enabled developments.
The value of the global student housing market is estimated at 12.72 billion USD in 2024. It is expected to rise to 18.72 billion USD by 2032. This indicates a compound annual growth rate of 4.95%.
North America is currently dominating the student housing market. Therefore, investors have reason to be optimistic about growth in the student housing sector within the U.S.
Before embarking on your journey into the world of student properties to rent, consider these strategic tips:
The student housing market is a promising sector of the rental property industry. With so many students looking for purpose-built student properties to rent, the demand is there.
One cannot ignore the crucial role location plays in student housing. It is not enough that there is a high demand in a particular region. There has to be a suitable location near university and college campuses, where one can develop such facilities.
The supply of student housing in any specific region should be matched to the demand there. Some towns have a higher student population, and thus a higher need for student-centric accommodations than other regions.
Property management software streamlines and largely automates the various aspects of rental property management. Property managers can use such software to organize lease agreements, property inspections, schedule maintenance, and much more.
What challenges and opportunities are there in student properties, and student housing in general?
Investing is by its very nature, speculative and uncertain. However, with the rise in student populations and the continued desire for purpose-built accommodations, investment in student housing has the potential for greater success. And there are different opportunities to take advantage of.
Older student housing infrastructure must give way to new and more capable student properties that can handle this growth. Another avenue to explore is that of sustainable and environmentally friendly student properties. The student housing market shows potential for “green” property development and investment.
Student properties see a higher turnover of residents than most other types of accommodation. This frequent turnaround presents property managers with unique challenges, especially in the areas of administration and property maintenance.
Student housing is not just about accommodation and does not cater to typical rental property residents. It requires in-depth knowledge of how student communities interact, and what students need to maintain their lifestyle both on and off campus.
This knowledge is advantageous in development and investment. Developers will use it to design and build students' properties tailored to their requirements. Investors, armed with this knowledge, will be able to identify which properties are going to attract the most interest.
Student housing data analytics offer vital insights for investors, developers, and property managers.
Investors can use them to assess the demand for student housing, and therefore where the most lucrative opportunities lie. This will help them determine when, where, and how to invest in student properties for rent, for the best return on their investment.
Developers can use them to pinpoint any emerging design trends as well as challenges in building student housing properties. It will help them understand and interpret new patterns in student housing so they can mitigate risks and optimize opportunities.
Lastly, property managers can leverage these analytics to identify areas that need improvement, thereby increasing resident satisfaction. In this way, data analytics support the best practices in student housing management, and thereby improve their operational efficiencies.
Other sources of logistical support may come from the property owners and stakeholders. However, one of the best practices is to use property management software.
The world of student accommodations offers savvy investors and property developers many wonderful opportunities. It also represents a whole new area of untapped potential for property managers. However, anyone interested in student housing must pay attention to both historical and current data.
Insight provides the foundation on which to build your student housing venture and offers the possibility of predictions for future endeavors. College House is here to help, with comprehensive data analytics & intelligence solutions specifically aimed at the student housing market.
Contact us today for more information or to book a demo.
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