Majority of new construction for apartments have been in form of student housing since 2000. The economics and demographics of Canada’s population has made new student housing an extremely profitable enterprise, offering a high rate of return for those who invest in the marketplace. The niche nature of student housing which includes uncommon demographic requiring amenities that is different from a typical purpose-built rental apartment projects. Investors will face difficulties if they come with a conventional apartment developer mentality.
There are currently 940,000 students enrolled in colleges or universities. That figure is expected to increase to over 1 million students by the year 2021. The already existing high demand for quality student housing in centres with universities will only increase. The demand will also come from students staying in school longer as they pursue more years in education.
Developers need to be aware that student housing comes with a unique set of demands that must be met before new housing leases out at the top rents. Location is a important factor to consider, since students are moving into their own house for the first time as well as many don’t have access to a car. Also students need to be close to their schools, so premium rates are paid for a property that’s close.
Student housing also means shorter term leases but with more tenants per year compared to conventional rental apartments. Even though universities offer classes year round, majority of market activities occur during the beginning of September and during the summer time it’s challenging to keep apartments occupied as students tend to go home.
High quality Buildings:
These days students have more disposable income with their parents willing to contribute towards housing costs, and other students sharing space to afford better accommodations. Highly considered features are privacy, purpose-built student housing must be designed with multiple bedrooms, with doors that lock, fully equipped kitchens and multiple bathrooms. Students will also pay for premium amenities such as fitness centres, game rooms, study rooms, flat screen TVs, double beds and nearby access to restaurants and movie theatres.
Student housing will require management-intensive investment due to parents and friends visiting, and during exam periods many students will stay in one unit to study. Landlords must factor in the potential increase in cost for wear and tear on the building. With student having greater disposable income and their families financially supporting them, A well-designed student apartment will get building owners more dollars per square foot than a conventional apartment.
Building In Strategic Location:
Developers will need to examine the market diligently with nearby universities. Build around colleges and universities that have great growth in the future. Some school are growing more greatly than other. Another note is to examine the university’s full-time vs. part-time enrolment figures, since only full-time students need housing. Major cities like Toronto and Montreal are known to have well established universities with large student populations compared to Humber River College which will great portion of it’s student body living nearby with their parents.
It’s an important factor to establish relationships with the nearby colleges and universities as the students are the target audience. The schools can provide advertising opportunities with its student through word-of-mouth and brochures.
It’s important to keep the community informed about developments and establish a platform to discuss and have potential solutions to any potential issues that will arise with students being part of the community.
As mentioned previously, it’s important to build high quality and secure developments that will attribute to a strong hold in the market. Amenities featured in condominiums will bring in the best tenants paying premium rents. It will also give a peace of mind to parents. The structure of the building whether it’s concrete or wood frame, high rise or low rise will be dictated by the needed demands in the area.
It’s beneficial to learn the nuances of the marketplace because student housing requires specialized knowledge in a specialized market. The benefit is in the rapid growth of the marketplace with quality clients.