Student Housing: The Next Great Investment Opportunity
However distant real recovery may seem to us today, no recession or housing depression in the history of the U.S. has outlasted the nation’s resourceful population. As housing prices stabilize and employers begin to hire, lending rates are bound to start looking up as well. No matter what the economy does, parents continue to find ways to send their children to college. Postsecondary enrollments often increase during tough economic times-and the current downturn is no exception to the rule-as young people with poor employment prospects attempt to acquire marketable skills. Despite ongoing fears about declining property values, players both big and small are taking an interest in demographic trends and finding good reasons to invest in student housing.
College Enrollments Are Projected to Increase
According to the National Science Foundation, enrollments at universities and community and private colleges will increase at a faster rate than the population in the U.S. Even in regions where the demographic aged 18 to 24 remains relatively unchanged over time, a higher percentage of this group will pursue some type of postsecondary education. Researchers estimate that college enrollments will increase by 13% from 2010 to 2017, and from 21.8 million to 28.2 million by 2050. In certain cities and states, the college-aged population is expected to grow at a much faster rate, fueling a demand for rental units and creating new opportunities for people to invest in student housing.
Colleges Supply a Steady Stream of Renters and Support Local Property Values
While real estate is always a regional story (meaning that national figures can’t tell you a thing about future prices in Lincoln, Nebraska), colleges generally provide reliable revenue to communities that feed and house thousands of students every year. Universities that are considered major research centers, along with connected hospitals and other facilities, offer high salaries to attract star scientists and faculty to college towns. These permanent employees purchase properties in the region, providing ongoing support for real estate values. Although people invest in student housing because colleges ensure a reliable demand for rental units, colleges can cushion the impact of plant closings and layoffs on property values in the surrounding region.
Mortgage Rates Are Still at Record Lows
While low borrowing costs haven’t sparked an interest in real estate in certain parts of the country, mortgage rates will rise in tandem with property values and sustained economic growth. Today’s low lending rates may allow you to invest in student housing that your son or daughter can use. You can reduce the cost of your child’s education by having roommates cover your mortgage payments.
It’s an oddity of human nature that people are the most afraid after the worst has already happened. Residential real estate, like the stock market, presents far less risk today than it did in 2007. Then, we couldn’t stop buying and now we’re too scared or broke to act. But some corporations and real estate investors aren’t waiting around for prices to recover. They’re buying up properties and companies that may never be this cheap again. To invest in student housing, start by researching the market in your local area. You might be surprised by opportunities you find in your own neighborhood.
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Category: Real Estate
Keywords: real estate, investing, student housing, investment opportunities, college housing