Any university or college student’s experience would be incomplete without student housing. Students, who are frequently underemployed, stand to gain the most from more cheap accommodation.
Student living also allows students the chance to interact with their peers and build communities in ways that are not possible in regular housing units.
Student housing is typically regarded as a beneficial form of investment due to the consistent demand for this kind of rental property.
Despite the pandemic’s (COVID-19) severe impact on transaction volumes in 2020, the industry recovered and saw investment volumes increase in 2022 and beyond.
While things have begun to return to normal and students are back on campus, during the autumn semesters of 2020 and 2021, the occupancy rate may have been a little lower than it was before the pandemic.
What is Occupancy Rate?
The percentage of rented/leased or used accommodation to the total quantity of available space is known as the occupancy rate.
Analysts utilize occupancy rates to discuss, among other things, bed-and-breakfasts, elder homes, hospitals, hotels, and a variety of rental properties. For the sake of this blog post, we will be discussing occupancy rate for student housing specifically.
How Much Does Renting a Student Apartment Cost?
The location, the distance from university, and the type of apartment are only a few of the variables that affect the average rent for student accommodation. In college towns, the rent for flats nearer to the school is typically greater than for those farther away.
Student Housing Statistics
In Fall 2021, properties less than one mile from school had an average rent of 607 U.S. dollars per month, while those closer to it cost 784 dollars per month. Additionally, rents vary across the nation.
This statistics illustrates the monthly lease velocity for student housing in the US for the fall semesters of 2017 and 2018.
For the commencement of the 2018 academic year, student housing spaces were 93.9 percent full in August 2018, which was a modest decrease from the 94.1 percent at that period the year before.
Another statistics says that both on-campus and off-campus housing consistently has excellent occupancy rates, which were 95% in 2018. (CBRE, 2019).
But according to 79% of on-campus housing officers, their organizations intended to keep using current on-campus living facilities during COVID-19 as prospective quarantine locations. (CBRE, 2020).
With 1,095,299 foreign students enrolled in US colleges and institutions in 2019, international students constitute a significant population for the student housing sector. (IIE, 2019)
In the student real estate market, 25 or more properties are owned by fewer than 20 companies. (NMHC, 2020)
With 169 sites and 104,078 beds, American Campus Communities is the largest owner of student housing in the US. (CBRE, 2019)
As of June 2020, the pre-leasing rate for student housing for the upcoming fall semester was 74.9%, which was almost 500 basis points less than the prior year. 2020's National Real Estate Investor
How Many College Students Live in Dorms
About 60% of full-time students who are enrolled in privately funded four-year schools and universities, compared to 36% of students in public institutes, and almost zero students in all the other sectors, reside in student housing.
Can Non Students Live in Student Housing?
Nowadays most types of student accommodation, including "student flats," which are really just mixed shared apartments, allow non-students to reside there. However, after that, you'll have to deal with the hectic pace of school life.
Business residences or their own apartment are suggested for people who want to live conveniently and experience the student ambiance at the same time.
On-Site Team Value and its Effects on Student Housing Occupancy Rate
In response to COVID-19, property managers of student housing have primarily expedited operational activities in order to provide tenants and potential residents with more technologically advanced management options.
Centralising collecting and other commonplace duties is one of such approaches.
The success and performance of an asset, however, depend heavily on the property management teams' capacity to provide residents with a memorable customer experience.
For instance, certain Asset Living on-site staff now have more time to update rules and regulations, personalize move-in processes, and improve resident communications, all of which have an impact on resident happiness.
In light of the competitive labor market, maintaining these employees is more crucial than ever. On-site lease requirements, however, as well as the drudgery of daily management, are frequently underestimated as we approach each fall semester.
The emphasis on advancing from a property-level role to a regional position is typically to blame for it.
Student Housing Occupancy Rates can be Determined by Preferences
Students have different preferences when it comes to housing. According to Nijnstein et al. (2015), there are significant differences in how people choose their homes.
Sociodemographic factors like income, gender, age, and education, serve as typical examples of this distinctive choosing behavior (Jansen, 2011).
Does Privacy Affect Student Housing Occupancy Rates?
By increasing the number of beds per housing unit, the problems of affordability and scarcity can be solved. However, double occupancy is less common in recent student housing in the United States.
Actually, just 5% of student housing constructed after 2010 offers double occupancy (Meuller & Havsy, 2020).
Additionally, both on-campus and student competitive housing have changed to include an equal number of beds and bathrooms.
For instance, 2/1 flats were common in student housing competitions prior to 1980. But by 2010, 2/1 units were all but gone, as they were replaced by 2/2 or 1/1 units (Meuller and Havsy, 2020).
The desire for single occupancy and parity between beds and bathrooms can be related to students' growing demand for privacy. One finding is that a lot of kids grew up with their own restrooms and bedrooms, and they want to keep having that privacy in college.
While we don't anticipate room sharing to totally vanish, recent trends indicate that students are increasingly choosing to live in apartments with more privacy.
Does Demographics Drive The Demand For Student Housing?
Yes, demographics and the growing middle class drive the demand for student housing thereby increasing occupancy rate.
The need for higher education and, by extension, the demand for student housing are being driven by demographics and the expanding middle class.
When enrollment increases led to a growing demand for college student housing, many campuses weren't prepared (McClure et al., 2017).
The number of students enrolled in higher education is anticipated to reach 594 million by 2040. (Calderon, 2018). In East Asia and the Pacific, enrollments will make up the largest percentage and total number.
The working class, which currently numbers around 4 billion people, is expected to grow to 5.3 billion people by 2030, or around two-thirds of the world's population, making it the largest socioeconomic group in the world (Kharas and Hamel, 2018).
As a result of the middle class' propensity to devote more of their wealth to education (Kharas, 2017), we may anticipate that higher education facilities will continue to expand, necessitating the need for additional housing.
Does Using Property Management System (PMS) Help Increase Occupancy Rate in Student Housing?
Every student housing property owner, investor, or property manager, should consider adopting property management software since it makes managing your mixed-use student housing facility more effective.
You're missing out on a lot of conveniences if you don't use a PMS. People spend more time at home when they have PMS.
Time savings is the main advantage of utilising a PMS. Lack of time is one of the main issues facing real estate investors and service providers.
With a student housing property management system like Booking Ninjas, you'll spend less time on administration, have more time to do chores that have been put off, and most significantly, have more time for yourself.
Final Thoughts
It is encouraging to see that the industry's leasing velocity is increasing again, as the pandemic's effects on rental activity were undoubtedly felt in the past 2 Aprils.
All things considered, the trend of student performance is reaccelerating, which suggests that demand is improving all around.
Demand tailwinds have also been boosted by the effect of students coming back to campus after a gap year or moving back close to universities with a more regular academic year.