How is Student Housing Different from Conventional Multifamily?

Overview: Student Housing vs Conventional Multifamily

Student housing and conventional multifamily properties may appear similar at first glance—both provide residential units for rent—but there are several differences in how these asset classes are developed, marketed, operated, and managed. Below are some of the biggest differences between student housing and conventional multifamily properties:

1. Target Demographic and Location

Student Housing

• Primarily serves college and university students, often located in close proximity to campuses.
• Demand is driven by enrollment figures, distance from academic buildings, and the university’s reputation.
• Amenities and features cater to a younger demographic looking for convenience and access to campus resources.

Conventional Multifamily

• Targets a broad range of renters, from young professionals to families and retirees.
• Location considerations vary more widely—close to employment centers, shopping, transit, etc.

2. Lease Structures and Terms

Student Housing

• Often uses by-the-bed leases rather than by the entire unit—each resident is responsible only for their individual bedroom (or sometimes bunk) and a share of common areas.
• Leases tend to align with the academic calendar, commonly nine or twelve months, with renewal cycles coinciding with spring or early summer before the fall semester.
• Parents or guardians often co-sign, mitigating credit risk but creating additional administrative needs.

Conventional Multifamily

• Typically uses per-unit leases—one or more occupants sign a single lease covering the entire apartment.
• Lease terms can be more flexible (6, 9, or 12 months, etc.) and do not necessarily follow a seasonal schedule.
• Fewer co-signers are required compared to student housing.

3. Turnover and Marketing Cycles

Student Housing

• In general, has higher turnover: most residents are likely to move yearly once the academic cycle ends.
• Marketing and leasing efforts intensify during key periods—primarily before fall semester.
• Operators plan for “turn season” when many (or all) units need refurbishing in a very short window (the weeks between semesters).

Conventional Multifamily

• Turnover is more staggered throughout the year.
• Marketing is ongoing without the pronounced peaks of an academic cycle.
• Unit turns are typically spread out, resulting in less intense periods of turnover.

4. Amenities and Unit Features

Student Housing

• Often includes amenities aimed at students’ needs: study lounges, group study rooms, computer labs, or dedicated bus shuttles to campus.
• May bundle utilities (internet, cable, electricity, water) into the rent for simplicity.
• Can have fully furnished units to attract out-of-state or international students, and to ease move-in and move-out.

Conventional Multifamily

• Amenities vary, but typically focus on broader lifestyle factors: fitness centers, pools, common lounges, dog parks, etc.
• Utilities are less likely to be bundled; residents often set up their own accounts.
• Furnished units are less common (except in certain markets or corporate housing).

5. Management and Staffing

Student Housing

• Requires a specialized management approach to cater to a younger and often first-time renter demographic.
• May employ on-site staff trained in conflict resolution (e.g., roommate disputes) and community-building.
• Higher volume of service requests (lockouts, maintenance) around move-in times; staff must be well prepared for a surge in inquiries each semester.

Conventional Multifamily

• Management staff focuses on a broader tenant mix with more varied needs.
• Maintenance requests are typically consistent year-round.
• Fewer unique challenges surrounding large turnover spikes.

6. Financing and Investment Considerations

Student Housing

• Lenders consider factors like university enrollment trends and on-campus housing policies.
• Often seen as a niche segment with a higher yield, offset by higher operational intensity and reliance on academic cycles.
• Investors watch for enrollment stability at nearby institutions, as occupancy hinges on student body size.

Conventional Multifamily

• Financing is typically more standardized, with numerous lenders comfortable with this well-established asset class.
• May be seen as less risky in terms of occupancy, given the broader renter pool.
• Investor focus is on local economic conditions, job growth, and demand drivers for housing.

7. Risk and Reward Profiles

Student Housing

• Pros: Can offer higher returns, stable demand in strong university markets, and the ability to command premium rents for well-located or amenity-rich properties.
• Cons: Greater turnover, heavier management requirements, seasonal leasing cycles, and vulnerability to enrollment fluctuations.

Conventional Multifamily

• Pros: More stable year-round occupancy cycles, broader tenant base, lower volatility.
• Cons: Less potential for premium rents (depending on market), typically lower yields, and more competition from other multifamily operators.

Conclusion

While both student housing and conventional multifamily properties may share the core function of providing rental units, they differ in lease structures, amenities, management, financing, and marketing strategies. Investors and operators who want to succeed in student housing must understand these differences—particularly the academic-driven leasing cycle and the need for specialized property management—to maximize occupancy, control turnover costs, and maintain profitability.