When making an investment decision, whether we know we are doing it or not – we put them into strategies – rumours, hot tip, value, momentum, growth, high dividend etc.
Investing in real estate is no different – what is your strategy?
- Capital appreciation
- Owning near a relative
- Trophy asset
- Potential immigration
- Distressed
- BRRRR Method
- Student housing
- Elderly homes
- AirBNB
List goes on…
In this article, let’s talk about student housing, one of the hottest real estate investment strategies at the moment.
It’s fairly logical –
Supply of on-campus housing has not changed over the past 30 years.
Meanwhile, the unprecedented wealth created globally has driven applicants from all over the world into U.S. universities. It’s much easier hiring more teachers and building teaching facilities than student housing. It’s also much sexier for donors to have their name on a Medical School than a dormitory.
Off-Campus Housing Trends
Moving off-campus used to be affordable, but not anymore. Moody’s analytics show that off-campus housing is now pricier than on-campus dorms in over 70 public universities. Rental prices surged by nearly 30%, burdening students with debt. In places like Austin, Texas, students opt for $1,300/month windowless rooms, which are affordable and highly sought after.
Globally, investors are eyeing student apartments for their rapidly increasing value. Over 40% of last year’s purchases came from major investors, highlighting its global appeal. CoStar analyst Chad Littell said, “Where is capital going in the commercial real-estate space? It’s following rent growth, and student housing is showing some of the strongest rent growth.”
In 2022, Blackstone spent $13 billion to purchase American Campus Communities, aiming for regions with high demand. They acquired the Crest at Pearl in Austin, where rent for windowless rooms spiked 25% from 2016 to 2024, nearing $1,300. Around 10% of the Crest’s bedrooms lack windows, with renting a bed in a windowless unit costing up to $1,500.
Top College Towns for Real Estate Investment
Investing in college towns is a savvy choice for international investors. With new students and faculty each year, the demand for housing remains consistently high, resulting in robust home values and rent price growth. According to a recent Roofstock article, here are the top 10 college towns where investing in rental property can be particularly lucrative:
1. Austin, TX
Austin is a vibrant city known for its thriving tech industry, home to the University of Texas at Austin, Concordia University, and Austin Community College. Often referred to as “Silicon Hills” due to its concentration of high-tech companies and STEM graduates, Austin offers a dynamic environment for real estate investment.
- Population: 965,872
- Educational Attainment (Bachelor’s degree or higher): 53.4%
- Median Home Values: $676,077
- Change in home values: 38.6%
- Median Rent (3-bedroom home): $2,396
- Rent change: 20%
- Renter-occupied Households: 61%
2. Ann Arbor, MI
Ann Arbor is a charming city known for its academic excellence, home to the prestigious University of Michigan. The university’s research infrastructure attracts high-tech employers, making Ann Arbor an attractive destination for real estate investment.
- Population: 121,093
- Educational Attainment (Bachelor’s degree or higher): 77.3%
- Median Home Values: $470,751
- Change in home values: 12.6%
- Median Rent (3-bedroom home): $2,550
- Rent change: 6%
- Renter-occupied Households: 48%
3. Provo, UT
Provo is a picturesque city nestled along the Wasatch Front, renowned for being home to Brigham Young University, one of the largest private universities in the U.S. With its growing student population and thriving community, Provo offers promising opportunities for real estate investors.
- Population: 116,886
- Educational Attainment (Bachelor’s degree or higher): 42.9%
- Median Home Values: $491,290
- Change in home values: 27.9%
- Median Rent (3-bedroom home): $1,598
- Rent change: 25%
- Renter-occupied Households: 57%
4. Orlando, FL
Orlando is a bustling city known for its diverse economy and vibrant culture, home to the University of Central Florida and Florida State University College of Medicine. With its strategic location and growing population, Orlando presents exciting opportunities for real estate investment.
- Population: 284,817
- Educational Attainment (Bachelor’s degree or higher): 40%
- Median Home Values: $354,259
- Change in home values: 27.5%
- Median Rent (3-bedroom home): $2,309
- Rent change: 28%
- Renter-occupied Households: 55%
5. Oxford, OH
Oxford is a quaint college town in northwestern Ohio, home to Miami University, renowned for its academic excellence. With its charming atmosphere and vibrant student community, Oxford offers unique opportunities for real estate investment.
- Population: 23,192
- Educational Attainment (Bachelor’s degree or higher): 64.4%
- Median Home Values: $284,054
- Change in home values: 14.2%
- Median Rent (3-bedroom home): $923
- Renter-occupied Households: 63%
6. Gainesville, FL
Gainesville is a dynamic city known for its academic prowess, home to the University of Florida, a hub for high-growth enterprises and startups. With its thriving economy and diverse population, Gainesville presents promising opportunities for real estate investment.
- Population: 133,611
- Educational Attainment (Bachelor’s degree or higher): 47.9%
- Median Home Values: $268,381
- Change in home values: 20.1%
- Median Rent (3-bedroom home): $1,699
- Rent change: 13%
- Renter-occupied Households: 52%
7. Scottsdale, AZ
Scottsdale is a rapidly growing city bordered by Tempe to the south, home to Arizona State University. With its thriving economy and diverse population, Scottsdale offers attractive opportunities for real estate investment.
- Population: 254,995
- Educational Attainment (Bachelor’s degree or higher): 59.5%
- Median Home Values: $820,126
- Change in home values: 30.7%
- Median Rent (3-bedroom home): $3,995
- Rent change: -2.0%
- Renter-occupied Households: 20%
8. West Lafayette, IN
West Lafayette is a charming city in northwestern Indiana, home to Purdue University and several private schools. With its strong educational infrastructure and vibrant community, West Lafayette offers promising opportunities for real estate investment.
- Population: 230,353
- Educational Attainment (Bachelor’s degree or higher): 35.3%
- Median Home Values: $324,806
- Change in home values: 21.8%
- Median Rent (3-bedroom home): $1,563
9. Rexburg, ID
Nestled in southeast Idaho, Rexburg is a thriving city known for Brigham Young University-Idaho, which drives both the economy and housing demand. With its significant growth in recent years, Rexburg offers great opportunities for real estate investment.
- Population: 39,409
- Educational Attainment (Bachelor’s degree or higher): 43.4%
- Median Home Values: $406,426
- Change in home values: 20.7%
- Median Rent (3-bedroom home): $1,548
- Rent change: 64%
- Renter-occupied Households: 70%
10. College Station, TX
College Station, situated between Houston and Austin, hosts Texas A&M University, known for its federal agency-funded research projects. With its strategic location and strong educational institutions, College Station presents promising prospects for real estate investment.
- Population: 115,802
- Educational Attainment (Bachelor’s degree or higher): 57.8%
- Median Home Values: $304,183
- Change in home values: 14.2%
- Median Rent (3-bedroom home): $1,450
- Rent change: 8%
- Renter-occupied Households: 68%
AM Student+ Loan Program
With the AM Student+ loan program, parents can easily secure financing to purchase condos near their child’s chosen university. Whether opting for a condo as an investment or a residence for their child during academic years, the program offers up to 75% financing across all 50 states, ensuring accessibility and convenience.
This loan program simplifies securing housing for university-bound children by providing hassle-free mortgage qualification without the need for personal income documentation. By leveraging the property’s projected rental income rather than personal income, AM Student+ streamlines the qualification process. Highlights include qualification based on rental income, flexible loan amounts ranging from $150,000 to $3 million, and no requirement for U.S. credit history.
Investing in suitable housing for your children’s university years is now more attainable than ever with the AM Student+ mortgage loan program. Don’t miss out on this opportunity to provide your children with a stable and safe place to live during their academic journey. Contact us today to learn more about how AM Student+ can help you make university housing a reality for your family.
