A couple of years ago, investing in student housing was only a reserve for investors who had the tenacity to take on the risks associated with student renters. A bulk of property owners increasingly considered this group of tenants substantially riskier compared to regular renters. Recently however, the tables have turned in favor of both students and real estate investors, mostly because student housing is now considered a resilient asset class with the capability to remain profitable even in a depressed macro-economic environment.
Interestingly, it’s not just in the US. The trend spreads across other countries, particularly in prime study destinations like Canada and the UK.
The State in The U.S.
In the U.S, for instance, investors and developers are mostly attracted by the demand trends for U.S. higher education. According to 2015 statistics by the National Center for Education Statistics, there are more than 20.2 million college and university students in the U.S. Although there’s almost a half a million year-over-year decline compared to the 2012 attendance figures, there’s an overall 4.9% increase compared to the same period in the fall of 2000. This population, as predicted, will grow to 24 million by 2022, with the echo boomer generation enrolling in greater numbers, and increased interest in U.S. colleges among international students.
These numbers, coupled with the fact that institutions are currently facing funding challenges in expanding on-campus accommodation facilities, has created a great opportunity for private off-campus housing to serve unmet demand. The exceedingly growing college population is providing a stable...