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Get Schooled in Real Estate Investing

By Brian Kline | July 14, 2014

Student housing has been ignored by mainstream investors for more than four decades but that is changing. Traditionally, Universities have funded on-campus housing and investors bought into off-campus apartments geared towards students. Now, Universities are looking more and more to private investors to finance new on-campus student housing so that the University can use limited funds for academic programs.

Student Housing as a Growth Industry

The need for new on-campus housing is real as the aging baby boomer generation housing is deteriorating and no longer suitable to the high tech needs of today's college students. The estimate is there will be 23 million graduate and undergraduate students by 2020. Some investors fear this could be a shrinking market because online college degrees are becoming a popular alternative. However, there is no indication that this is happening in substantial numbers. Many degrees such as nursing and sciences require real life lab time that requires being on campus.

Another stimulus to student housing growth is the increasing number of international students coming to the U.S. for a college education. Since 2006, the number of international students studying in the U.S. has ballooned from 200,000 to 764,000 and is still growing. In 2006, it's estimated that foreign student made up 5% of the student population. That number is expected to increase to 12% by 2021.

All indicators are that from replacing baby boomer housing to growth from international students, there will be a continued need for new student housing.

© ratch0013 -

© ratch0013 -

Fastest Growing College Towns in the U.S.

Here are the ten fastest growing college towns in the country:

1. Raleigh, North Carolina - student growth rate averaging 46% over ten years.

2. College Station, Texas - student growth rate averaging 38% over ten years.

3. Las Cruces, New Mexico - student growth rate averaging 31.5% over ten years.

4. Gainesville, Florida - student growth rate averaging 30% over ten years.

5. San Marcos, Texas - student growth rate averaging 29% over ten years.

6. Columbia, Missouri - student growth rate averaging 28% over ten years.

7. Fayetteville, Arkansas - student growth rate averaging 27% over ten years.

8. Flagstaff, Arizona - student growth rate averaging 24.5% over ten years.

9. Auburn, Alabama - student growth rate averaging 24% over ten years.

10. College Park, Maryland - student growth rate averaging 23% over ten years.

Student housing is estimated to be a $4 to $5 billion dollar industry. Typical on-campus units vary in cost from about $800 to $1,400 per month. This includes all of the utilities and amenities such as cable TV and internet connections. While off-campus housing may appear less expensive at first glance, when all of the costs are accounted for, on-campus housing is usually the better deal.

It's difficult to paint this industry with a broad brush because there are more than 4,000 Universities and colleges across the country. Some will see booms in enrollment and others will see declines. You'll want to perform a thorough due diligence before placing your money on the table.

Please leave a comment if this article was helpful or if you have a question.

Brian KlineAuthor bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.

Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years with articles listed on Yahoo Finance, Benzinga, and uRBN. Brian is a regular contributor at Realty Biz News
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