Curious to see what other BP members are seeing who are active in college rental markets around the country. Here are some of the metrics from Champaign-Urbana (Home of the University of Illinois).
New multifamily units in Champaign (citywide) from 2005-2014:
2005: 588 | 2006: 272
2007: 591 | 2008: 245
2009: 80 | 2010: 279
2011: 292 | 2012: 226
2013: 288 | 2014: 818 (That's an increase of 284% of 2014 numbers)
Source: T.J. Blakeman, based on city of Champaign data
University (UIUC) Enrollment 2005-2014 Total (Grad/Undergrad):
2005: 40510 | 2006: 41180
2007: 40923 | 2008: 41495
2009: 41918 | 2010: 41949
2011: 42606 | 2012: 42883
2013: 43398 | 2014: 43583
Source: UIUC Division of Management Information
Overall the enrollment is creeping up and I would expect this to continue or even accelerate a bit over the next 5 years to help offset the decrease in funding from the state. My take is to not try to compete with the new/high-end rentals which are renting from $650 -$1400 per bedroom. Although I would love to get a property which brought in those type of numbers per bedroom the competition is going to get pretty intense which the increase of units over the past couple years. Grad students look to be the bright spot in the coming years, with a good number of them living off of their Research Assistantship or Fellowship which is somewhere around $25,000/year. You can see how most of Grad students are not going to be looking for the $650-$1400 because they simply can't afford the rent.
*Note: UIUC has the highest percentage of international students compared to any other public university. This is where a good number of the students come from who could afford $1400/bedroom/month.
What are others seeing out in the student housing space? Similar trends? What does the future hold, a bunch of properties going cheap when the owners can't fill the units and go belly-up?
Scott Dixon
