Student Housing Investments

Hot Market Segment for Multifamily Investors

Investing in student housing and multifamily student properties is a hit among real estate investors because of the potential to make good money.

Why is it so popular? Well, it all comes down to the lease. The lease terms can really make or break the profits for investors. Most students sign leases before the school year starts, which helps investors plan their cash flow accurately.

Student housing leases usually last for 12 or 13 months, ensuring the property remains occupied throughout the year. And when there are empty units, being close to the university helps investors find new tenants quickly.

Investing in multifamily student housing seems to be one of the safest bets in real estate, making it an attractive opportunity for investors.

Think of it this way: student housing is just a part of the multifamily asset class, where job opportunities usually dictate the demand.

Since the return to campus post-COVID, both students and educators are back, which helps maintain a steady demand for student housing, shielding it from economic fluctuations and ensuring a reliable income stream.

The Multifamily Market is Bouncing Back

The multifamily market has been going strong both before and after COVID.

Moody’s Analytics CRE reported a robust rent growth of 10.6% year-over-year in Q3 2022, despite a slight dip from Q2 to Q3 2022.

Although the annual rent growth has been slowing down for the past nine months, rents are still rising faster than they were before the pandemic hit in March 2020.

All in all, this consistent rent growth in student housing is great news for investors eyeing opportunities in the multifamily sector. Despite rising interest rates and high inflation rates, the multifamily market continues to generate profits for investors.

The multifamily student housing investment market is an extension of the strong multifamily real estate market.

An Expanding Market

Student housing investments saw some good growth in Q3 2022.

The fall preleasing period ended in September, with 96.6% of bedrooms at Yardi 200 universities already leased, according to Yardi’s National Student Housing Report.

As of September, the annual rent growth stood at 4.1%. Although it dropped from the peak of 5.1% earlier in the year, it's still quite high compared to historical standards.

Investor interest in student housing remains strong due to the solid market fundamentals.

Yardi 200 reported student housing sales of nearly $2.4 billion in the first half of 2022, and Blackstone's acquisition of American Campus Communities for $12.8 billion in April 2022 shows confidence in the multifamily student housing sector's future performance.

Exploring the Multifamily Market

The multifamily real estate market remains robust despite high inflation rates and rising interest rates. With student housing performing exceptionally well, multifamily rentals continue to offer promising investment opportunities for real estate investors.

Whether you want to tap into the booming build-to-rent market or venture into traditional multifamily properties, WestWard Capital can provide you with the multifamily financing you need through our range of real estate investment loans.

Our sales, credit, and capital markets teams have years of experience assisting investors nationwide in obtaining loans for multifamily properties.

We offer a comprehensive range of loan products and investor financing solutions for every investment strategy — from simple bridge loans, rehab and fix & flip financing, and long-term stabilized multifamily loans to complex structured finance solutions.

Our clients have diverse investment strategies, so we have tailored our loan options to meet their individual needs. Contact us today to discuss your next deal, or if you already have a deal in mind, speed up the process by applying now.