The Challenges of Investing in Student Housing
Investing in student housing is a smart idea, but it’s not spared from unique challenges that this niche market offers. Students are a very transient population in rentals. This dramatically affects the leasing cycle, turnover, and maintenance, to name a few.
Yesterday, we wrote about the best practices in investing in student housing. However, it’s also important to acknowledge the potential obstacles you might face when investing in student housing:
Constricted leasing cycle.
Most students move into their new apartments in the fall and spring. This limits your marketing and leasing efforts to these small windows of time. Missing these crucial windows will limit your ability to fully rent out your availabilities.
High turnover rate.
Turnover is high when the school year is over. This also means that very few students renew their lease year-after-year. Since most students leave after the school year is over, this also means that you risk having empty rooms until school picks up again.
Student renters are notorious for throwing wild parties and failing to take care of rental properties. (Note: Not all student renters are like this. There are likely more responsible student renters than not.) Some students have never lived outside of their parents’ home before. Therefore, they’re unfamiliar with taking care of property, which could cause more maintenance and cleaning issues for you
Missed rent during the holidays.
Since most student residents are renting for the first time, they’re not accustomed to paying monthly rents. The holiday season is a common time when rent payments tend to slip. Students usually leave during the holidays to go home or go on vacation. They may forget to pay the rent before they take off, which can pose a problem if you’re relying on the payment.