Now that the industry is maturing, some are wondering if there is any real upside remaining within this area of investment. After all, the area of student housing may be so saturated that there is no space left in the market.
There are factors pointing to possible problems for the student housing industry. Student debt is a major focus. With the cost of higher education increasing, many students and their parents are wondering if college is really that worthwhile of an investment. Potential students are considering opportunities in trades and other fields that do not necessarily require a college education. Furthermore, many who do decide to go to college are opting to attend nearby schools, or even take advantage of one of the many community colleges located throughout the country.
Another factor leading to some hesitance regarding further investment in student housing is over supply. Even those who are bullish on student housing investments recognize that some universities do have an over supply of housing. Texas A&M, the University of Florida and the University of Illinois are just three examples of major institutions with more student housing units than students willing to live in them.
What are some of the reasons that investors should consider investment in student housing? First of all, enrollment in college overall is still on the increase. In spite of the potential for student debt, there are a large number of students who still view a college education as key to advancing economically.
Another factor on the positive side for investing in student housing is the fact that many of the mid-size and smaller colleges in the United States actually have a student housing shortage. These smaller schools need places for students to live that have the modern amenities that current students demand.
A final positive factor for continued investment in student housing is the track record of the investment. The industry came through the Great Recession relatively unscathed. Even though the industry is maturing, there should be no major events on the horizon that would hinder the industry. Analysts believe that the key to investing in student housing is to invest in housing at the right college in the right area of the country.