In keeping with last week’s theme of investing in secondary markets, this week, we want to talk about investing in markets that you have maybe never considered before, but that are proving to be quite lucrative when talking about commercial real estate. Today, we want to talk about investing in student housing or off campus housing in cities that have colleges or universities. As with any investment, there are pros and cons, but there is a lot of untapped potential when you are looking at the student housing market!
Why Invest Here?
One upside of investing in student housing is that it is recession proof. It is a pretty proven fact that when we hit economic lows, students flock to universities in order to build up their education so that when it all turns around, they can force their way to the top of the list in the job market. And when all of those students decide to uproot their lives and enroll in classes at top universities, they need housing. And urban campuses are much less likely to experience the evacuation during the summer break. Students and millennials alike are looking for higher end experiences with the opportunity to invest themselves in communities that offer amenities and activities that will enhance their learning experiences.
What to Look For?
When you are looking at student housing, one of the biggest things to consider is location. Finding properties that are within walking and biking distance from campus are an absolute game changer. Without this key consideration, it is almost pointless to invest in a property that you are aiming at students because their mode of transportation is often unreliable at best, and walkable campuses and cities are high on the list of demands for college students.
The second thing that should be an absolute is finding the right layouts for these students. In general, Freshman and Sophmores care less about the layout of an apartment, they are more likely looking for inexpensive, easily accessible housing with simple solutions for roommates, such as separate bathrooms and adequate storage space. In general, Juniors and Seniors are looking for a more “home like” experience. They are looking for better kitchens, washer/dryer hookups, and are more likely to consider a townhouse style unit. When looking at add value properties, you want to make sure that you are able to offer the upgrades and amenities to your target tenant while keeping rental rates affordable for what they are looking for. Again keeping in mind that upperclassmen are looking for more than underclassmen, and you should see who is in greater need of housing in the area that you are investing in.
Are you interested in investing in add value properties? Let us help! Magnolia Design Properties is a real estate investment company that is honed in on add value multi family properties in the B and C class and we would love to have you join us in investing! Head over to our contact page and fill out the form so that we can contact you with information about investment opportunities that you can join us in!
