Why Invest in Student Housing Properties?

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Top Reasons to Invest in Student Housing

Reasons why student housing is booming and a significant opportunity for investors!

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1. Recession-Resistant Characteristics

Student housing occupancy rates remain stable during economic booms and may actually rise during downturns because of increased college attendance.

 

2. Students Are Staying in School Longer

Four years is no longer the standard for degree completion. According to the U.S. Bureau of Labor Statistics, exactly two-thirds of high school grads are taking significantly longer to complete their degrees. Where are they going to live while in school?

 

3. Increase of Rental Rates

Overall the rental revenue, rental rates, and net operating income in student housing properties across the country have continued to rise year over year due to student demand and limited space.

 

4. Value-Creation Potential

Increased student housing demand by renovating and creating value-add improvements to the properties, may help realize higher returns at a faster rate as compared to the acquisition of stabilized assets.

 

5. Optimal Investment Strategy

Student housing provides appreciation potential, an inflation hedge, portfolio diversification, and monthly income with tax efficiency through depreciation anchored by student housing assets.

80% of College Students Live Off-Campus1

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Our Strategic Criteria for Selecting Student Housing Properties

We target properties that are well-located, occupied and profitable.

 

• Close proximity to campus (Pedestrian-to-campus)

• University markets that have a sizable and identifiable housing need with limited supply

• Solid overall sub-market performance

• Strong historical track record

Undergraduate Enrollment is Expected to Increase by 14% Between 2015 - 20262

Student Housing Investment Options

• 1031 exchange

• IRA eligibility

• $50,000 minimum investment

• Fractional ownership or direct participation in institutional grade properties

• Monthly cash flows

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College attendance has increased in every recession since 19603

Student Housing 1031 Exchange Benefits

Defer Your Capital Gains Tax

Allows investors to defer capital gains on the sale of their real estate.

 

Monthly Cash Flow

Investors can sell a low income producing property (e.g. land) and purchase property(s) with potentially greater cash flow performance (e.g. student housing).

 

Portfolio Diversification

Investors can expand the number or types of property in their portfolio and in various markets and/or states.

 

Increase Depreciation

Investors can exchange from a non-depreciable or fully depreciated property (e.g. land) into a property that can be depreciated (e.g. student housing). Thus providing shelter from taxation of a portion of the monthly cash flow.

 

Property Management Relief

Investors who no longer want to manage high-maintenance properties can reinvest in properties that are fully managed.

Why-Invest-in-Student-Housing-Properties-Building

4,600 College Institutions Service Over 20 Million Students4

Sources:

1. J Turner Research On Student Housing

2. National Center Of Educational Statistics Study May 2017

1. Stanford economist Caroline Hoxby

2. National Center Of Educational Statistics 2016