How to Enter the Student Housing Real Estate Market – Nelson Partners

Firms like Nelson Partners and others like them have carved out a nice niche in the student housing market. What is so appealing about this strategy? How do they grow their businesses to meet demand in the growing student housing market?

By working with institutions of higher learning, they provide dorm space at discounted rates for students. The institutions get more funds, and the developers get a steady income stream that they can turn into an appreciating asset later. What started as a small housing niche has now exploded to include new construction, renovation, and land acquisition opportunities.

It is not just the developers making money off of this growing market. Owners are also getting in on the party by investing with them through Fundraisers, which offers fractional real estate interests that allow private real estate investments and diversify their portfolios. In addition, they offer a one-click investment process that makes it easy to invest in properties around the country from your computer or mobile phone.

Landlords are also adapting by offering student housing only leasing options to students and requiring a higher credit score before approving a lease to ensure they can ‘do business with them later.

At first, the student housing niche was only available to large developers to secure institutional funding or find other sources of debt that would allow them to move quickly on land acquisition opportunities. Now, however, that has changed as well. With Fundrise’s open market real estate investing platform, more investors can get in the game to make money from this growing market.

Investors can also be a part of the student housing niche by shopping around before enrolling for classes, signing a lease, or even moving into a dorm room or apartment. Using Fundraise, you can find out if there is any investment opportunity currently available in your area and invest as little as $1,000 per project. Then you can track it closely as the investors below have been doing and potentially gain from their experience.

Here are some other ways the average investor can grow their wealth by investing in student housing.

Buying properties near campus

Investors can gain monthly income from students paying higher-than-average rental prices by purchasing a property near campus. It also provides them with the added benefit of ‘in demand’ tenants who are less likely to leave if they are satisfied with their living circumstances. Having that built-in tenant base is not only appealing, but it does provide an extra level of security if the market changes.

Buying off-campus properties for students to live in

Investors can also purchase homes or other rental properties close to campus but not on it. These are generally lower-priced but provide a nice alternative for students who don’t want their college experience marred by living on campus. It allows them some independence while satisfying their need to be near campus. The other added benefit is that off-campus rentals are usually owner occupied, which provides a nice source of income for investors and can lead to even more investment opportunities should they want to add other properties later on.