Thinking of expanding your investment portfolio this fall? Student housing saw a 10 percent increase in value over the past year, even as several other commercial real estate (CRE) sectors experienced a decline. The student housing market is also projected to continue in an upward trend over the next several years. Learn more about how to invest this growing market, and discover how a seasoned real estate lawyer can help you make the first steps.
Why Invest in Student Housing?
Student housing is unlike any other CRE sector. It tends to be less volatile since students typically continue to enroll in college, despite (and sometimes because of) economic downturns. Another major advantage to this market is that students typically only sign year-long leases, so landlords can analyze the market each year and increase their rental rates accordingly. Since the rent costs are typically shared between roommates, landlords can also typically charge more per square foot in a student housing unit – especially if they are in a highly desirable location. Lease renewals may also be easier to obtain in areas nearest to campus since students often know well in advance whether they will be returning the following year.
Student Housing Landlords Face Unique Challenges
Although there are many potential benefits to investing in student housing, landlords who invest in this market often face some unique challenges. While rent may be paid by the student’s parents (which often means consistent, timely payments), there are students who rely on financial aid for their housing needs. As such, the landlord may need to accommodate a tenant who pays their rent on a quarterly basis. Students may also return home for the summer, so they may not sign a full year lease, so landlords often need to prepare for a lag in the summer months.
Maturing adults may also struggle with certain tenant issues, like calling in to let the landlord know that there is a leak. There could also be issues with noise disturbances with certain students. Landlords can attempt to mitigate these issues by being patient but firm about their expectations for student tenants.
Breaking Into the Student Housing Market
Whether you want to take a hands-off approach to student housing and invest in an REIT or wish to purchase and rent student housing on your own, it is important to have seasoned legal assistance. With more than 40 years of legal experience, Stock, Carlson, Oldfield & McGrath, LLC can help protect your investment and advise you of your options in the student housing market. Call 630-665-2500 and schedule your personalized consultation with our DuPage County real estate lawyers to learn more.