Student Housing Investing: High Occupancy, High Returns
When most people think of student housing, they imagine "Animal House" style parties and holes in the drywall. But smart investors see something else: recession-proof demand and premium rents. Renting by the room in college towns can generate 50-100% higher cash flow than traditional single-family rentals.
Table of Contents
1. Why Student Housing?
The math is simple. A 4-bedroom house rented to a single family might fetch $2,000/month. That same house rented to 4 students at $750/room brings in $3,000/month.
- Parental Guarantees: You aren't just relying on a 20-year-old's income. Most leases are co-signed by parents with established credit.
- Consistent Demand: Universities are economic engines. As long as the school is open, students need housing.
- Low Vacancy: Leases typically run 12 months (August to July), regardless of whether students stay for the summer.
2. Location is Everything
In student housing, "walkability" is the gold standard.
Properties within a 10-15 minute walk to campus command the highest rents. Once you get beyond walking distance, you are competing with massive apartment complexes that have pools and gyms. To win there, you need to offer better value or more privacy.
3. Structuring the Lease
Never sign a single "joint and several" lease with a group of students if you can avoid it. Instead, use individual room leases.
- Control: If one student doesn't pay, you can evict just that one student without disturbing the others.
- turnover: It's easier to fill one vacant room than find a whole new group of 4 friends.
4. Management Tips
Student housing is management-intensive. Expect more wear and tear.
- Durability Over Luxury: Use LVP (Luxury Vinyl Plank) flooring instead of carpet. Use semi-gloss paint for easy cleaning.
- Furnished Units: Renting furnished units allows you to charge a premium and makes move-in/out easier for students.
- Clear Rules: Be explicit about noise, parties, and guests in the lease.
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