Reasons to Invest in North American Student Housing

Monday, May 31, 2021

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Foreign investors have been flocking to North America to dip their toes in the off-campus housing market for years. investigated what has been drawing these international investors and found a few interesting facts!


A Less Volatile Market

Foreign investors are drawn to this market because student housing does not follow normal real estate trends. During a recession, real estate investments are susceptible to fluctuation due to changes in job development and growth. Student housing, on the other hand, tends to work oppositely. As a recession hits, student enrolment grows and an increase in post-secondary attendance is seen. Due to this, foreign investors feel their money is in a safer and more stable environment.


The student housing market is also replenished each year. The departure of fourth-year students brings the arrival of a new first-year class. This creates more security for investors, as they are working within an applicant pool that helps regenerate itself.


Higher ROI

Investors have also become aware that students will share accommodations differently than other type of tenants. Shared bathroom, kitchen, living room and laundry appliances are the norm for college and university students. Landlords can provide more rental options by offering shared accommodations. When local bylaws permit, landlords can accommodate several tenants per unit this way and generate a higher return on investment.


The Prestige

International investors are also being drawn to North America due to the prestige of their children studying abroad. Over the years, colleges and universities across Canada and the United States have seen an increase in international student attendance. With this, more and more international families are purchasing homes abroad for their children to live in during their academic career to ensure safety, quality of living, and savings. This not only provides more affordable off-campus housing for the students, but also reduced living expenses for the parents when coming to visit.


Foreign investors have also been known to want to give back to their own Alma Maters by developing more student housing in the area surrounding the institution that helped shaped their lives.


Low Vacancy Rates

Dense, student-populated cities tend to have low vacancy rates, creating a high demand for more student housing units. International investors have recognized this and are beginning to capitalize on the demand in these areas.


Scarce Purpose-Built Student Housing

In a lot of cities with low vacancy rates, purpose-built student housing tends to also be scarce. Acknowledging this need, the United States has been able to develop the market well. However, Canada on the other hand, is said to be 10 years behind the USA in purpose-built student housing development.


Foreign investors are continuing to take advantage of the untapped market by being the ones to expand off-campus and purpose-built student housing.


SEE ALSO:  The Best Cities to Invest in Student Housing in Canada - 2020 Edition
                     The Best Cities to Invest in Student Housing in the USA - 2020 Edition

The Team