Student Housing

In saying ‘meet the parents’, we’re not referring to that comedy with Ben Stiller and Robert Deniro.  We’re talking about meeting the decision-makers in student housing – the student’s parents.   More often than not, parents are the real decision makers. Quite often, they are the financers for the rental accommodation too. The reality is that many underclassmen in college and university are still relatively dependent on their parents. This is why meeting the parents is kind of a big deal when it comes to student housing.   In a recent study conducted by J Turner Research and the National Apartment Association, over 3,600 parents were asked about their preferences and involvement in choosing student housing for their children. There were some interesting findings that strengthen the notion that parents are in fact the real decision makers:   56% of parents reported that their children paid 0% of their student housing costs. Only 13% of parents reported that their children paid 100% of their student housing costs. Other than rent, 71% of students receive $200 or more per month in financial assistance from their parents. Only 14% of parents reported giving their children $0 in assistance per month.   These statistics demonstrate that parents play a pivotal role in financing both a student’s living accommodations, as well as providing additional financial assistance for general living expenses. Without a doubt, parents have a heavy influence on the decision-making process for student housing, which is why landlords and property managers should focus on appealing not......

As enrollment numbers for colleges and universities across North America continue to rise, so does the interest to invest in the niche student housing market. As Axiometrics stated, student housing is in and investors are flocking to the sector.While many investors and independent landlords are eager to enter this niche rental market, it’s important for them to do some market research first, as well as analyze their local universities and colleges.Here are some key considerations to think of when determining if your city is a good place to invest in student housing: 1. Student Enrollment & Growth:The first consideration to analyze should be the potential size of a tenant pool. Just because there is a college or university in a city, doesn’t necessarily mean it will be a good place to invest in student housing. Cities that boast a student population exceeding 10,000+ are ideal, as this makes the student housing sector a larger and more appealing niche.Another factor to consider is whether or not the schools within that city are steadily growing or if their student population is remaining stagnant. Growth is particularly important when planning for the future.  2. Residential vs. Commuter School:The second consideration is to determine if the schools within that city are residential or commuter schools.Residential schools are ones characterized by a very strong sense of community, typically fostered by having the vast majority of students living on-campus. Residential schools usually have a very low percentage of students who live off-campus, making them unattractive to student housing inv......

Student renters are somewhat of a unique breed of tenants. Quite commonly, they have unique needs and don’t have any rental or credit history, which can make the screening process more difficult. To help landlords with this process, we’ve compiled a few tips for screening prospective student tenants.Considering most rental inquiries will come via telephone or email, a landlord can have a set of questions prepared for potential tenants to save time. In addition to the standard questions a landlord will ask such as name, contact information and preferred move-in date, the landlord should also get more detailed. The tenant’s responses could potentially disqualify himself or herself immediately. For example, if a landlord operates a non-smoking or no pet rental, it would be beneficial to ask right away if the tenant has a pet or smokes.   Landlords should also ask more student specific questions. These questions could include:   Do you already have a roommate or people you plan to move in with? How long of a lease are you looking for? When does your school term begin?   These questions are of equal importance in the prescreening process. For example, if the student renter is only looking for a one-term lease (5-6 months), but the landlord wants a one-year commitment, this wouldn’t be the best tenant. Also, if the student’s term begins in January, but the landlord needs to fill the rental for September, this also won’t work.   Most landlords ask for a credit check and previous landlord references. While these are common ......

It should come as no surprise that most young college students have never actually written a check. Times have changed significantly! The old ways of paying rent are slowly becoming dated and less favorable for today’s generation of renters. Let’s review a variety of payment methods and the pros and cons for each.Cash:Cash is king, as the saying goes. This isn’t always the case when it comes to paying rent though. Many landlords with a room for rent within their home would gladly take cash as payment; however, student housing operators, leasing companies and property managers will likely not accept cash.   Wondering why?   Cash must generally be accepted in person. Landlords and property managers would not want a tenant leaving cash in an envelope at the property or sending it via the mail.  Cash creates more of a hassle. The landlord would have to pick up the money, provide a receipt each month, and then make a bank deposit immediately.   Cash doesn’t leave as effective a paper trail for records, especially if it’s not accounted for properly. There are far easier methods of payment for both landlords and tenants.   Personal Check:Checks are most convenient for landlords and property managers, as the accounting process is easiest. When a check clears the bank, it instantly creates a record of payment. The problem is that a lot of student renters don’t have checks, have never written a check, or prefer to pay in a different manner.   Other issues to consider are the pot......

Student Housing presents some interesting dynamics and challenges for Property Managers and Leasing Consultant Teams. Some of my most recent observations include: Helicopter Parents who initiate the leasing process for their college-age “child” because their “child” is simply too busy to find a place to live off-campus.  Many colleges and universities require Seniors to live off campus. Students are told this from the beginning, but somehow, it amazes me every year when some distraught parent calls looking for housing at the last minute. The most obnoxious residents in the Student Housing market are those students majoring in Pre-law or who are enrolled in law school. Without a doubt, they are the most argumentative of any resident.  They often do not read their housing contract until it is time to move out, at which time, they will argue every paragraph (even the same paragraphs previously initialed.) Students will order everything through Amazon. I wish I was an investor in Amazon. They even order toilet paper and diapers, something I never saw happen in my conventional properties. Students generally show up to events which provide giveaways for free food. The most polite Student Residents have been our Student Athletes. Not sure what the coaches instill in these students, but these Students are a pleasure to know. A lot of Students seem to be REACTIVE when it comes to paying rent on time. “What? Oh wait! Rent is due every month on what day???? Nobody ever told me that.” The apple does not fall far from th......

Over the next decade, the European student population is set to grow exponentially, with an estimated 8 million students to be enrolled in post-secondary institutions across the continent by 2025. This increase in enrollment has created a higher demand for student housing in many countries in Europe.   Currently the United Kingdom is the leading country in terms of student housing accommodations and investment, followed by Germany and France. As the student housing market continues to mature, investors are starting to look at new countries in which investment opportunity lies. This begs the question, what countries in Europe hold the most investment potential for student housing?   Two good indicators of the demand for student housing are the student population and the student housing provision rate. The provision rate is calculated by taking the number of student registrations and dividing it by the total number of places in student halls (purpose-built student housing). Here’s a snapshot of the top 10 European countries, according to highest student enrollment rates in 2013 (Savills, European Student Housing).   1.     United Kingdom:  2,500,000 students, 21% student housing provision rate. 2.     Germany:  2,400,000 students, 11% student housing provision rate. 3.     France:  2,300,000 students, 11% student housing provision rate. 4.     Spain:  1,900,000 students, 8% student housing provision rate. 5.     Italy:  1,800,000 students, 2% student housing provision rate. 6.     The Netherlands:  670,000 students, 17% student housing provision rate. 7.     Sweden:  460,000 students, 23% student housing provision rate. 8.     Belgium:  450,000 students, 11% student housing provision rate. 9.     Austria:  360,000 students, 16% student housing provision rate. 10.   Switzerland:  250,000 s......

As enrolment rates at colleges and universities across North America continue to rise, the demand for off-campus housing is also rising. As a result, investors and property owners are recognizing the financial opportunities available within the off-campus housing market.      Before making an investment in student housing, property owners and investors should analyze the market that the rental accommodation(s) is located in. There are many situational factors to consider:   How many college or universities are in the surrounding area? Are enrolment rates increasing or decreasing at these schools? How much on-campus housing is available? Are there restrictions regarding which students can live off-campus at these schools (do freshmen & sophomores have to live on-campus)? What is the academic calendar for these schools (start and end dates for each semester)? What is the leasing cycle like?   Other market factors to pay attention to include:   What are the going rental rates? How competitive is the rental market? Is rental licensing required?   This information can help property owners and investors get a firm understanding of how in-demand student housing is within a given market.   In relation to market research, investors and property owners should also consider the leasing habits of student renters. Every rental market is a little different and the tenants will have certain nuances. For example, it’s important to know exactly when student tenants are looking for housing. In highly competitive rental markets, students may be signing leases up to a year in advance of the r......

With each passing academic calendar year, more and more student housing is being made available for colleges and universities across North America. There has been a great deal of speculation within the multifamily housing industry on whether or not there is an oversupply of student housing hitting the market. Some industry insiders have proclaimed that the student housing market is becoming oversaturated, especially within the United States. Others believe this is a myth. Let’s examine some facts. Beginning in the late 2000’s, REIT’s and private-equity firms began adding a great deal of purpose-built student housing to their portfolios, as they saw great investment potential. The Wall Street Journal claimed that some developers overestimated future enrollment rates and didn’t consider other student housing developments, which led to an oversupply in some markets. This is perhaps what sparked the discussion about national oversupply in student housing. However, this oversupply was only occurring in a select few markets within the United States. It’s imprecise to attribute a national trend of oversupply, based on only a handful of markets. While it may hold true that certain popular college towns are in a state of oversupply, there isn’t enough quantitative data to demonstrate oversupply on a national basis. AxioMetrics estimated that in 2014, a total of 60,000+ beds, both on and off-campus, would be delivered nation-wide for the fall. This has created concern. However, it should be noted that while student housing deliveries are increasing, they are being spread across more universities and states than in the past (s......

At the start of 2014, many analysts were expressing deep concern about the number of new student housing developments scheduled for delivery in time for the Fall 2014 semester. With the new academic year well under way, it seems safe to say their fears about potential oversupply were wrong.   About 65,000 new beds were delivered to the privately owned, purpose-built student housing sector this fall - approximately 6,700 more than last year - and the overall performance has proven stronger than it was one year ago.  Occupancy in already existing off-campus properties averaged 95.8% in September 2014 on a same-store basis, some 190 basis points (bps) higher than the 93.9% recorded in September 2013.   At times, media have reported that properties were struggling to fill beds, with too much supply being the supposed culprit. As seen in the chart below, those low occupancy rates are outliers, as most properties achieved an occupancy rate greater than 90% by September 2014, even those more than one mile from campus. Similar outliers can be found in other real estate sectors, and there is often an underlying reason for the performance that has little to do with supply.     Anyone following prelease occupancy rates throughout the leasing season saw the hints of stronger performance for Fall 2014. It was obvious in November and December last year that beds were being leased at a faster clip than the previous year. While the spread in outperformance narrowed during the spring months, properties made a......

It’s only the second week in September and you’ve already received several complaints from tenants detailing how they can’t stand their roommates! Like many landlords, you believe that it isn’t your responsibility to mediate roommate conflicts. After all, you’re a landlord, not a conflict resolution specialist. You tell the tenants that it’s their responsibility to work out any differences and come to a mutual understanding. What else can you say? It’s not like you’re going to evict a tenant for not being a good roommate.  Should landlords care about roommate conflict? Roommate conflict scenarios are an unfortunate reality when dealing with student housing. It’s common for landlords to rent by-the-room, which often involves having tenants live together who know nothing about one another at first. If a landlord is lucky, a group of friends will rent out the vacant unit or rooms, but it’s not always practical to expect this perfect group of students will apply for housing together.   When roommate problems occur, what should landlords do?  Regardless of the market a landlord owns rentals in, one thing always remains consistent – the goal to keep profit margins high and vacancies low. A great way of achieving these two goals is by maintaining a high lease renewal rate. To accomplish this, it’s important to ensure that current tenants are happy and enjoy their accommodations. If a tenant experiences roommate conflict, the odds of him or her renewing the lease is considerably low. This probability of renewal is even less, if the landlord doesn’t at......