One of the fastest growing segments of the multifamily industry is student housing. These properties located in towns populated by universities are earning some of the highest returns for investors making investor demand stronger than ever. This has also increased the demand for student housing loans. As a result, there are some great commercial mortgage programs available to help student housing property investors.
One reason for the growth in this sector is due to the fact that more universities are opting to privatize student housing instead of developing their own housing on campus. For many universities, it is difficult to find land to expand and some just do not want to expand their resources in supporting additional housing. With enrollment at many universities around the nation growing, the demand for new student housing has grown with developers and investors ready to jump in and meet that demand.
No matter the size of the property, most student housing complexes typically afford investors higher returns. This is because most of these properties are rented out by the bed or bedroom instead of the entire unit. One unit may have four tenants but each tenant pays $800 per month resulting in a total of $3,200 per month just for that one unit. Rents are even higher in larger markets where housing costs are at top levels.
Not only is this a prime investment opportunity for large institutional investors, but it is also ideal for smaller investors. There are a growing number of small properties between 20 to 50 units in size being built in college towns. With land costs escalating in college towns and land availability scarce, it has made more sense to develop smaller properties. This has opened the door for investors looking to invest under $5 million.
At K2 Commercial Finance, not only do we have experience in facilitating student housing loans for small investors, but we also offer programs that enable these investors to secure their loans fast and without any additional hassle. For those seeking commercial financing for midsize properties student housing properties, the Commercial Preferred Program is a perfect program for loans over $3 million.
In today’s world, there are a growing number of investors who need more creative solutions to securing commercial loans for student housing. Hard Money Loans offer a great alternative in situations where conventional financing is just not an option. These loans are also best when borrowers need access to capital fast.
The timing is ripe for investors to capitalize on student housing properties. With more people going to college than ever before, the outlook for these multifamily properties is stronger than ever. Investors should not let this opportunity pass them by and take advantage of these great student housing mortgage programs designed to help them make the most of their investment.