Not every college can offer housing to every student. It has been found that more than 40% of college students have to live in off-campus houses. Here, you can fill this demand and add to your monthly cash flow.
Should You Invest in Student Housing?
Advantages of Investing in Student Housing
· High Demand, High Rent
Usually, most universities or colleges cannot offer a four-year housing facility to all of their enrolled students. As a result, finding no other way, students have to rent student apartments to attend classes. And because of this, there are hardly any vacancies in the campus area.
You can make the best use of this high housing demand and increase your monthly income.
But is it ethical to charge more from the students?
Students usually rent an apartment with multiple roommates and share the rent with each other. As a result, even if you ask for a higher rent, it won’t affect them much individually.
So, how can you increase your monthly rent? If the rent for a multifamily house is $2,000, you can increase it to $2,400 when you rent it to students. And if you rent the house to four students, every student will have to pay $600. Thus, you can boost your monthly cash flow.
· Property Conditions Aren’t a Big Factor
When you have a regular property, and a new tenant arrives, you will have re-paint the house, shine up the windows, and keep the house in good condition. But when you invest in student housing, you won’t have to do all this stuff. Because students cannot afford luxury houses, and they have lower expectations when it comes to the condition of the house. However, this doesn’t mean that you will hand over the apartment in bad condition. It just means that you are not upgrading units between tenants.
Disadvantages of Investing in a Student Housing
· You May have to Communicate Directly with the Tenants
It is most likely the first-time students have lived on their own in most university or college off-campus housing. As a result, they have to manage all their grocery shopping, laundry, and other things by themselves. And while doing all these, they may fail to properly communicate with the property owner. So, when it comes to receiving rent or other issues, you will have to take the initiative and deal with the tenant directly.
· They Can Cause Damage to the House
Apart from the communication aspect, many university and college students have cleanliness issues. And because of this, you can notice mold, pests, rodents, etc., on your property. Moreover, if the tenant is irresponsible and a party animal, it can damage your property. And repairing the house requires money and time.
Even when you repair the house, and a new group of students arrive, they can damage the house again, and this cycle can continue.
Conclusion
It comes down to how much return you want from your rental real estate. Do you care about the property’s condition? Do you want to deal with college goers or teenagers? If you don’t care much about the other things and only focus on monthly returns, investing in student housing can be a great choice.
