Report Explores Profitability of Student Rentals

Demand for private, off-campus student housing has been growing as college and university enrollments have been rising — almost 40 percent in the past decade, squeezing the supply of on-campus housing.

Responding to that trend, the National Student Housing Council (NSHC) and the National Multi Housing Council (NMHC) released their 2012 Off-Campus Student Housing Income and Expense Benchmarking Survey. The only such survey specifically targeting the off-campus student housing sector, it includes data on 370 properties from 25 companies in 46 states.

The report confirms that off-campus student housing properties are continuing to lease predominantly by-the-bed, with every student in an apartment responsible for his or her own lease.

Properties in this survey that leased by-the-bed reported earning less per bed in rental income and spending larger percentages of their rental income on operating expenses than properties that lease by-the-unit, but this may be due to product mix (by-the-unit properties typically have two or more beds per unit).

It is interesting to note that prior studies have shown that on a per property basis, more income is derived at properties that rent by-the-bed.

Also of note in the report, late-fee income varies tremendously by property. For example, late-fee income ranged from $13.41 to $110.61 per bed for mid- to high-rise properties that leased by-the-bed. However, for garden-style properties that leased by-the-unit, late-fee income ranged from $22.26 to $114.26 per bed. A propertys location also factored into the late-fee income averages.

Data is provided by type of leasing structure; the report also breaks out the data results by property age, property type, property size and ownership/management structure.

In addition to the general results, which provide the full aggregate data for all 46 states, the survey includes select regional results and state-level data for Alabama, Florida, Georgia, Indiana, Michigan, North Carolina, Ohio and Texas.

For more student housing information or to order a copy of the report, contact NMHC.

NSHC is a subsidiary of NMHC.

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