There has been a huge rise in activity concerning student housing in the property management industry in the last few years. There are more young people attending college and universities today more than ever. This is partly due to do the fact that the society places a high value on higher education, and for good reasons. With more students attending college, as well as an increase in the ease by which funding was available through student loans, has caused the demand for student housing to substantially skyrocket over the last decade or so. Dude to this reason, choosing to invest in student housing, especially the premium projects developed by companies like Nelson Partners becomes an extremely smart move.
Owing to the surging demand for student housing and attractive yields provided in this sector, numerous investors are considering to get into the niche of off campus housing investments. However, just investing in these properties is not enough. They have to be managed properly as well, and its leasing arrangements need to be taken care of smartly.
Here are few valuable pointers about leasing arrangements of student housing properties:
- Always sign a one-year lease: Students usually go back home in the summer. Hence, if they have the opportunity, they will only pay rent for 9 months out of the year. The problem here is that landlords typically do not calculate the missing three months of rent in a year while determining their cash flow. Many collage towns turns empty during the summer. Hence, property owners would require a one year lease to ensure that their property stays rented throughout summer.
- Always sign a joint lease: A joint lease is where each of the residents is fully responsible for all of the terms of the lease. This basically means that if a student suddenly drops out of the college, chooses to go home and stops paying the rent, the remaining roommates shall be responsible for paying the full amount of rent.
- Get co-signers: Majority of college students has very limited rental history, and some have none at all. A few of them might have a part time-minimum wage job or no job at all. They also may not have any credit history. Hence, landlords need to make sure that their student tenants have financially qualified co-signers who can be fully responsible for the rent. While certain students will meet all the financial obligations in a timely manner, and would not even require a co-signer, it is important to be prepared for defaulters.
Student housing is in high demand, and has emerged as a great niche for real estate investors to get into. It can be a recession proof investment as well, as even during crisis most people are likely to pursue higher education. Details of premium student housing properties to invest in can be found in the website of Nelson Partners or similar companies.