5 Reasons Why You Should Be Investing in Student Housing
Student housing is widely regarded as one of the best-kept secrets in real estate investing. It offers a very high level of stability, consistency, and above all else, profitability. Student housing has been relatively untapped by investors who operate in the public markets when compared to other forms of real estate investing for the simple reason that, for a long time, it was considered a niche asset class, strictly reserved for the wealthy.
This sector of commercial real estate has often eluded a large number of investors due to the minimum investment amounts which typically start at five- or six-figure sums. With few able to invest at such high levels, student housing has traditionally been dominated by institutional investors, high-net-worth individuals, and private asset managers.
Wealth managers acknowledge that high-end investors love investing in the student housing asset class, with vast sums of money apportioned to the sector. Student housing offers a level of stability rarely matched in any other corner of the market, yet remains one of the most profitable investment endeavors in real estate.
According to a 2017 report by Savills, global investment in student housing reached $16.4bn in 2016. The UK and the US stand out as the most mature markets, hosting the vast majority of investable stock. In 2016, the US received a total of $9.8bn in student housing investment. The US market garners high yields, particularly for such a mature market. In 2016, student housing leases in the United States averaged 5.9% in net initial returns.
Student housing is an investment option which may have historically been largely untapped by those who operate in the mid or lower ends of the scale. That is, until recently. A small number of REITs have opened up access to these types of deals to the public sector, allowing everyone to benefit from high yields and stability. Here are the 5 reasons why you should be investing in student housing.
According to the National Center for Education Statistics, it is estimated that over 20 million students enroll in college in the United States each year. This means that the demand for student housing has a high level of consistency year-over-year, with a continuous stream of new tenants arriving every fall when the new school year begins.
Unlike regular residential property, student housing is considered to be resilient to economic stagnation and recession. Even during economic downturns, enrollment in college tends to maintain a consistent level, sometimes even rising as a lack of employment options forces people towards furthering their education.
Student housing has a very high profit potential for a number of reasons. Landlords can charge more per square foot than in the regular residential sector as houses are often shared among roommates. Residences which are closer to campus also tend to demand higher rental rates than standard residential housing due to the simplicity of getting to and from class.
It is not wholly uncommon for parents to help their children out when they fly the nest and go to college. This provides a great level of security for landlords. Parents are often on hand to ensure their children’s rent is paid on time, providing landlords with a higher degree of stability for their monthly income when compared to regular tenants whose payments rely on their work status.
One of the best advantages of student housing is the fact that leases are signed for just one year. This means that landlords can revise the value of their rental property, adapting to the conditions of the market fluidly, raising their rates according to the current demand in the market.
Investing in Student Housing with iintoo
iintoo is a New-York based social investment platform which offers the opportunity for real estate investors to get involved in a variety of market segments, including ground-up development, residential housing, senior living, hospitality, office buildings, mixed-use assets, and the aforementioned lucrative student housing projects.
As a global Real Estate Investment Management Company (REIMCO), iintoo carefully assess the risk of all investment opportunities by verifying a project’s developer, the project’s construction/renovation plans, and forecasted financials and revenue.
The state-of-the-art digital platform provides access to real estate investments that were once exclusive to professional financiers and high-net-worth individuals. For as little as $25,000, accredited investors can own shares in high-yield commercial and residential real estate projects.
iintoo offers access to a number of student housing projects in the most lucrative areas in the United States. iintoo provides the platform to invest in stable, secure, and high-yielding student rentals, allowing real estate investors the ability to get ahead of the competition and get involved in the hottest investment opportunity of 2018.