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Investing in Student Housing
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56436258.Chico_State_jan03In the last decade, student housing has risen the ranks of investment popularity from necessary evil to attractive opportunity. Overcrowding in university dorms and expensive on-campus living costs have helped boost demand for off-campus housing options in Chico. Student housing development has caught the attention of investors and developers because despite the high turnover, student housing is resilient, as it proved during the economic downturn.

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Succeeding in student housing, however, takes work. The demographic has distinctly different wants and needs, but the stable increase in demand makes it a worthwhile investment. Here are some things to keep in mind as you navigate the world of student housing.

Not all students can afford Class A properties. 

While the Chico students who can afford it will shop for units with cool amenities, there are also plenty of students who choose off-campus housing as an alternative to expensive on-campus living. In general, the Chico student housing pipeline leans towards luxury Class A properties, but don’t forget about the students on a budget. Affordable, basic units address the needs of middle and lower socioeconomic students, an important demographic – especially as tuition costs rise.

It’s all about location.

Even the largest, most luxurious apartment community located a mile from campus won’t have the leverage to charge as much – and have as low of a vacancy rate – as a class B property located right across the street from campus. In the student housing market, location is the king. Remember that many Chico students don’t have cars and get around by walking or biking. A great location insulates you from potential overheating in the market, and will also give you a leg up over the competition 

Join the amenities race.

Chico student renters are tech-savvy and environmentally conscious. While you don’t need to go the extra mile and offer lazy river pools and movie theaters, students will prioritize units that have amenities like access to high-speed Internet, bicycle storage, and parking. Basic green features like recycling and energy efficient appliances can also align your community with students’ preferences.

Every campus is different.

Before you invest, get an understanding of the student housing market in the area. Is the market oversaturated? Is the university’s student body growing fast enough to absorb new inventory? Take a look at the vacancy rates in the area, ask local real estate professionals about the demand for housing, look into planned student housing projects in the area, and see if the size of the school’s student body has been expanding. Many large, public universities currently lack the funding to build the residence halls they need, setting the perfect stage for investment success. The last thing you want to do is invest in an overbuilt market that doesn’t have sustainable demand.