Student Housing: Record rental of student housing in the US.
The US student housing rental market is experiencing an unprecedented phenomenon this early fall, with a rental cycle that is setting records for speed. Know the details here.
The latest student housing pre-leasing report prepared by Berkadia revealed that student housing is being rented in a much shorter period than in previous years, breaking all records set so far.
In the recently released report, it is stated that “The operating fundamentals of student housing are among the strongest of any commercial real estate industry”, confirming that it is one of the most sought-after types of real estate at the moment, which will continue to grow in the coming years.
Here’s why this fall leasing cycle has become the fastest on record for student housing, looking at the reasons behind the trend and its implications for renters and landlords.
A change in preferences that enhances housing
One of the main reasons behind the record speed in the fall leasing cycle for student housing is a shift in the preferences of college youth. The COVID-19 pandemic has had a significant impact on the way students approach higher education.
With many institutions embracing hybrid or fully online modes of learning, students are rethinking their housing needs. Now, more than ever, they value comfortable and suitable spaces for studying at home, which has led to an explosive demand for homes that adapt to these new needs.
In recent years, student life was characterized by closeness to campus and constant social interaction. However, the pandemic drastically changed this dynamic. Physical classrooms became virtual classrooms, social interactions dwindled, and once-busy college campuses became quieter.
The students were forced to adapt to a new learning style and consequently began to search for housing that would provide an environment conducive to study and concentration.
Apartments and houses that offer dedicated workspaces, reliable internet connection, and modern conveniences have become especially attractive to this new generation of students.
Student housing generates higher returns
The growing demand for housing or residences for students has strengthened the real estate sector in this sector, presenting in recent years a large number of residence projects -or that include residence- for students.
This is further increased in areas highly populated by university students such as the city of Gainesville, home to the University of Florida, where the growing arrival of students has completely transformed the concept of student residence, giving way to modern buildings but also generating large investment returns.
In fact, according to Berkadia’s pre-lease report, “At a time when the investment community focuses on low-risk assets, student housing continues to offer investors some of the best risk-adjusted returns in any assets”.
Shortage of Available Housing
Another factor contributing to the record speed in the fall leasing cycle is the shortage of available homes. During the pandemic, construction of new properties has been hampered due to economic restrictions and challenges.
This has led to a decrease in the supply of homes available on the market. As a result, students find themselves competing for a limited number of housing options, which has expedited the leasing process.
The housing shortage is especially evident in urban areas near college campuses. In these areas, demand has historically exceeded supply, leading to a highly competitive market.
Students looking to rent properties in these locations want to be close to their classrooms (even if they are virtual) and the conveniences that college life has to offer. This has created a situation where available housing fills up quickly and leasing decisions have to be made in a matter of days, if not hours.
Competition between Students
Competition among students to secure adequate housing has also contributed to the record speed in the fall leasing cycle. Areas close to college campuses are often the most sought after, which has led to increased competition among students for these properties.
This has led to situations where leases are signed quickly as soon as they become available, which in turn has driven the speed of the lease cycle.
Students, aware of the accelerating demand for housing, are taking more proactive approaches in their search for leases. Many are willing to sign leases early, even months before the start of the school year.
This not only gives them the peace of mind that they have a safe place to live, but it also allows them to ensure that they will be close to campus and other essential services.
Implications for Tenants and Landlords
For renters, the record speed in the fall rental cycle may mean they need to make quicker decisions and be prepared to compete for the homes they want.
Advance planning and thorough research become essential in such a competitive market. Tenants must be willing to submit complete applications and provide the necessary information quickly to secure their place on the list of potential tenants.
On the other hand, landlords can take advantage of this accelerating demand to set competitive prices and make sure their properties are attractive to students. Those that offer additional services, such as modern furnishings, cleaning services, or even high-speed Internet packages, can stand out in a crowded market.
The speed of the lease cycle also gives landlords the opportunity to establish long-term leases and build strong relationships with trusted tenants.
In short, the fall leasing cycle has become an amazing phenomenon in the US student housing market. The reasons behind this record speed include changes in student preferences, a shortage of available housing, and increasing competition among students.
Both tenants and landlords must adapt to this new dynamic, making planning and quick decision making key elements in this evolving market. As the fall leasing cycle continues, it remains to be seen how these trends will impact the future of the US student housing market.
Ultimately, the record speed in the lease cycle reflects the resilience and adaptability of both students and key players in the real estate market.
Investing in BAI Capital is investing in the United States
With a presence in the real estate sector in the states of Florida, Texas and New York, BAI Capital specializes in generating value from the acquisition of land to the development of mixed-use projects, such as residences for the elderly, student residences, multifamily buildings. for rentals and mixed use, including condos and retail.
Our mission is to safeguard the capital of the partners and the own capital under the minimum risk exposure. With a safe development and going through all the stages: Land purchase, adjustment of urban zoning, commercial vision in architectural development and management of building permits. Then, we take charge of the capitalization, construction and exit with return of the capital and profits to the partners.
In this way, we guarantee fixed and stable returns for your client portfolio. In addition to having a confidential work protocol with encrypted web forms. Use of protected personal data and private meetings with our agents throughout Latin America.
You already knew about the record for student housing rentals in the US. If you are looking to protect your capital from inflation through investments with returns in dollars, or invest in projects that qualify for the EB-5 investor visa to get a Green Card, complete our form and an agent will contact you.
