The student housing market has come a long way in the past 10 to 15 years. Off-campus property owners and developers started making a more concentrated effort to design and build properties that would appeal to student renters in the mid-1990s. That shift was motivated by the recognition that students are driven by different wants and needs, as well as a desire to better compete for a piece of this very large – and lucrative – segment of the rental market.
The result has been the creation of a hybrid or cross between traditional apartments and on-campus dorms. Student housing has a number of factors that sets properties apart from typical market rate apartments. One of the notable differences is the emphasis on creating appealing common area space. Student housing apartments devote more space to social interaction, such as TV rooms for movie night, study rooms and fitness centers. More properties boast pools, sand volleyball courts, outdoor BBQs and fire pits – catering to that young, communal lifestyle that goes hand-in-hand with college living.
Some student housing properties have attracted attention for the “Club Med” style of living. Certainly, not all properties are designed to resemble a vacation resort or luxury condo. However, amenities are definitely a key part of the package. When you have a whole cohort of college residents who are all near the same age and have common interests, it makes sense to deliver services and amenities that cater to those needs. From the manager/owner’s perspective, such properties loaded with amenities and unique features also receive a significant benefit from social media and viral marketing. When students invite friends over for volleyball or movie night, they quickly realize what they’re missing out on.
Location is another important part of the equation. Students want quick and easy access to campus, and locating within walking or biking distance is a priority. Some properties even offer shuttle services to improve their “proximity” to campus. An April 2015 ABODO online poll of more than 100 students found that the majority of respondents (64%) prefer to live in an apartment that is less than a 15-minute walk from campus.
A final differentiator is the seasonal nature of the business. Apartment rentals in a broader metro area such as Phoenix are very much a year-round activity. However, student housing rentals are very seasonal. In some high demand campus markets, the housing search can begin as early as 10 months in advance of the move-in date.
For example, ABODO was founded by alumni from the University of Wisconsin-Madison. The university has more than 40,000 students, many of whom are looking for near-campus housing around the same time. Move-in dates for Madison students tend to be August 1 or August 15. But, apartment searches start to ramp up in October of the prior year, well in advance of the school year. That search activity tends to taper off during the holidays, Thanksgiving and Christmas, and then increases again when school resumes in January. Students want to have their housing pre-arranged for the following school year by the time May hits, so they don’t have to search for housing remotely, or scramble to find housing at the start of the year.
All of these factors magnify the importance of targeting student housing renters with the right product, in the right location and in the right time frame.