Nelson Partners Mentions Why Renting Property to College Students Can be a Good Move

Certain investors find the thought of renting out their properties to college aged tenants pretty intimidating. Many of these student tenants might have never lived on their own before, and hence the concerns can be pretty legitimate. However, as per the market trends, student housing investments can have a number of advantages as well, especially if one chooses to invest in properties developed and managed by well-established companies like Nelson Partners.

With millions of new students entering colleges and universities across the United States every year, college towns often prove to be a goldmine for real estate investors. College campuses create a consistent demand for student housing, and can help drive higher rents and yields for property owners.  Renting to college students can provide a lot of advantages to investors planning to expand their investment portfolio, wanting to capitalize on passive income opportunities or/and create a retirement strategy. It can also present a key opportunity for investors who have a low marketing budget.

Here are a few advantages of student housing rentals:

  • Low maintenance: The overall upkeep of student housing properties can be pretty minimal and easy, in comparison to other types of rental accommodations. Students typically rent out these units for two to three years. Hence, the financial investment is quickly recouped before any income is generated from rent/rentals.
  • Excellent returns: The rate of returns on student housing properties is pretty high in comparison to many other types if investment vehicles. This is owing to the fact that the market is pretty large and low risk, while having a steady demand.
  • High demand: Modern students are willing to pay a premium for good quality accommodation like the ones developed by Nelson Partners, which obviously is good news for the investors.  Students will always need colleges and universities to pursue higher education in, and hence they will always require adequate accommodation for their college years. Therefore, the demand for student housing properties, particularly in college towns, would be pretty high.

College towns have built-in demand and the expense of student housing can equal high rental yield for investors. Moreover, many of the college students will have lower expectations compared to typical renters. All of these factors strengthen the appeal of student housing as an investment opportunity.  The biggest appeal of student housing investments, however, remains its yields. Owing to the high demand of such properties, college housing rentals can generate a higher and more stable cash flow than traditional investment properties. In fact, it is not uncommon to find a student housing project generating more income than a similar apartment building nearby. Property investors must keep in mind that even though rentals for student accommodation can be costly, on campus room usually is more expenses. Moreover, most campuses are capped at the number of students who can live on campus.  Hence, most students look for off campus housing facilities.

By Clare Louise
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