Troy,
I have heard of people having a hard time filling vacancies, however that is in a farther out area or it is bad build/rehab/ect. There are a lot of investors simply building for cashflow. With no regards to how hard it will be to rent out later on. My best friend has about 85 beds now and is building more. I used a leasing agent I was friends with last year and will use her again if she is still doing it.
Honestly I saw product that I as a former student would never want to live in. New construction with tiny living rooms and small bedrooms simply to get as many beds as possible in the square footage. Is there a huge influx of building in that area? Yes. Is a lot of it crap product and not well designed? Also yes.
Right now if someone is not able to get rented I would guess it would be marked by being in a bad location (anything west of gratz, below CBM or above diamond) and trying to charge new construction prices (550-650/rm), tiny rooms, bad rehab, or another issue. I am not saying the market is not getting filled in. But there is still a need for units in the area that are well done. Maybe this means instead of doing a 12 bed duplex you do a 8,9,10. Since you will won't have to worry about renting it since it will be more desirable I think that trumps the loss of monthly.
I bought an 8 bed for 380K I rent at $4,800/month. I was offered a 12 bed for 400k that if it was filled would be $6,000/month. I won't even touch the 12 with anyone else's money. It will forever be hard to rent because it is a ****** design. tiny rooms and tiny kitchens.
I also think there were a lot of investors who saw/see the opertunity and don't understand the need to have a leasing agent or be very hands on and proactive about renting. I start right around or before thanksgiving. you get a better pool of students and they are more proactive.