7 Pro Tips for Improving Student Housing Property Management Operations

An excerpt of this article was originally published by YieldPro

With its high rate of turnover and steady demand, the student housing market is a lucrative yet challenging niche within the real estate industry. In this article, learn about the unique preferences of young renters and unlock the best strategies around student housing property management.

Understanding Student Housing Property Management

Student housing is a specific type of residence designed for students attending a university. These properties come in a variety of on- and off-campus forms, including dormitories, apartments, and co-ops. They can be affiliated with the school or privately owned by a company. Privately owned student housing complexes enlist the help of property management companies to maintain and grow the community. But managing housing for students comes with its own unique set of challenges. So putting in the research to understand student-specific tenancy is critical to developing a robust property management plan.

Today, the student housing market continues to grow as a profitable venture within the real estate sector. According to statista.com, the number of enrolled college students in the US is expected to reach 19.25 million in 2024. With a steady stream of demand for beds, it’s no wonder why investors are attracted to this corner of real estate. In 2019, student housing came in 5th for non-traditional assets preferred by investors, with the total industry transaction figure reaching $22.9 billion in 2022. And with growth expected to escalate over the next several years, developers compete to provide beds for the mass of students incoming. The 5 largest suppliers in the industry as of 2022 include American Campus Communities, The Scion Group, Harrison Street, Greystar, and Landmark Properties, with the latter expected to develop a staggering 39,000 new beds by 2026.

With the sheer volume of inventory and tenants cycling through each academic year, solid student housing property management is vital. And while some multifamily tactics translate to the student housing landscape, managing student housing has its own unique strategies and specific needs, as outlined below.

Navigating Student Housing vs. Multifamily Properties

A few key traits separate student housing property management from the traditional multifamily portfolio due to its student-specific tenancy. Distinctive features that impact how to manage student housing includes:

• Adjusted utility management
  While traditional multifamily companies can explore various options surrounding utility billing and management, student housing is complex due to its “by the bed” structure. Determining how to monitor and divvy up consumption can be challenging when one unit harbors multiple tenants.

• Tech-based communication methods
  With the vast majority of students being a younger demographic, resident expectations of communication may differ from that of a diverse multifamily complex. Students expect fast-paced digital communication options, with notifications and chat features reflecting their standard of ease and convenience.

• Student-specific amenities
  While multifamily properties may typically offer family-friendly amenities due to its broad range of resident demographics, student housing communities may offer more specific comforts tailored to the college experience. These can include study centers, wifi, social facilities, and more.

• “By the bed” billing structure
  Unlike the typical rent structure of a multifamily complex where residents are charged per unit, many student housing properties choose to charge by the bed. In looking for affordable off-campus accommodation, students will opt to live with roommates in a dormitory-style or suite setup. This allows student housing developers to charge multiple rents per unit.

• Academic year lease cycle
  Unique to its market, student housing tends to operate its lease and billing cycle off the academic year. In this case, leases may last somewhere between 9-12 months. This differs from a multifamily leasing situation in which the property may offer contract terms more suited for a family.
• Co-signed leases
  Student housing property managers may see more co-signed leases than they would managing a multifamily portfolio. Students are more likely to have an adult such as their guardian co-sign a lease, adding a layer of protection to rental payments for this property type. This is because many college students are young adults with little to no financial experience and may require assistance to secure a lease.

Taking everything into account, managing student housing properties poses distinctive challenges that demand a customized approach. Effectively navigating the prerequisites for student housing property management can cultivate a positive community experience for residents while safeguarding your NOI.

Student Housing Management Challenges: 7 Strategies for Success

Now that we’ve explored student resident needs, we can better understand this market’s exclusive challenges and solutions. To do so, we should spotlight the demographic this portfolio type serves. A growing slice of the present-day renter market is made up of Gen Z, the generation born between 1997 and 2013. With the youngest of this group reaching teenagehood and the oldest hitting their late twenties in 2023, this generation completely encompasses the age range making up the largest population of current-day college students, ages 18-24. Conclusively, that makes Gen Z the prime demographic for student housing.

With our resident audience in mind, let’s dive into seven common hurdles we see in student housing property management and the strategies to overcome them.

1. Communication breakdowns
2. Lack of community engagement
3. Frequent resident changes
4. Outdated payment processes
5. Time-intensive administrative tasks
6. Utility billing confusion and disputes
7. Overlooking sustainability initiatives

1. Meet Student Renters Where They Are – On Their Smartphones

A 2023 study surveying over 2,000 American renters revealed that Gen Z and younger millennials have higher expectations around technology and communication channels. The survey found that 79% of renters look for a centralized communication solution that offers direct message, text, or chat options. Increasingly, modern renters prefer digital methods to streamline communication. This is further supported in our 2023 Residence Experience Management Report. A survey of 630 multifamily professionals found that a tech-enabled lifestyle topped a list of the most important amenities to renters. This is followed by communication and responsiveness. Considering Gen Z’s standards around seamless and instant customer support and messaging, a robust communication strategy is vital in today’s student housing management efforts.

Strategy:
The insights above highlight the growing significance of a tech-enabled lifestyle and effective communication for modern renters. This is particularly important for the younger generation. As a student housing property manager, establishing clear communication channels tailored to student preferences will go a long way in easing friction.

The traditional way to engage a residential community – including bulletin boards, flyers, emails and phone calls – won’t be as effective in reaching young renters these days. Gen Z and Millennial tenants live on digital platforms. The best communication solution for a student housing property would be to leverage a resident mobile app. Resident mobile apps help you easily deliver announcements, automate reminder texts or push notifications, organize community meetings, and facilitate conversations with residents. Features such as real-time chat and group messaging cut down response times. And a powerful dashboard enables on-site staff to reliably manage communication across the property. Property managers and team members benefit from the lighter lift and improved efficiency, while student renters’ tech-based messaging standards are met.

2. Foster Community Connections

A unique aspect of student housing management is tenant interest in socializing with fellow students. Many students who choose to live in a residential community near school are eager to make connections. This is a benefit for property managers who hope to curate an engaged, well-connected community, and also builds brownie points towards higher retention rates come turn season. While the demographic is ripe for community engagement, it can be difficult on the part of property management and staff to invent and facilitate regular social opportunities.

Strategy:
Students expect regular social opportunities from their college communities. Student housing properties are no exception. Recognizing the unique interest students have in socializing with their peers, property managers should look to hosting community-building activities. This fosters engagement and feeds student needs for networking. Luckily, there are resources available to help property managers plan creative community events. This can include activities ranging from seasonal gatherings to movie nights and educational programs. With a resident app, facilitating these activities through announcement channels can be low-lift for on-site staff as well.

Another way to foster engagement is by connecting students to the community in which they live. Student housing is especially unique in that the majority of students are likely new to the area. One way to help facilitate community connection is by partnering with businesses in your property’s surrounding neighborhood to provide residents with exclusive deals and discounts. Shops and restaurants are sure to offer student deals when in proximity to a college campus. Residential properties can work to compile a list of nearby deals and distribute them to residents. Local businesses benefit from the exposure while property managers enjoy higher resident satisfaction and a good working relationship with the surrounding area. Overall, partnering with the neighborhood creates a more connected community. And a well-liked, well-connected student housing property is likely to attract and retain more renters.

3. Plan for Frequent Resident Changes

Student housing experiences an annual resident turnover event unlike any other portfolio type in the industry. Dubbed “the turn” or “turn season”, this annual interval marks the mass migration of residents as students complete and begin the academic year towards summer’s end. Like a wheel turning, students end their tenancy, leaving the door open for a new crop to begin theirs. It’s the most stressful time of the year for student housing property management and can last days or weeks. That said, amid the chaos, this is prime time for leasing mistakes to slip through the cracks.

Strategy:
There are a few tactics property managers can employ to prepare for the mayhem of turn season. Asset Campus Housing recommends planning early. Property managers should establish timelines, set deadlines, and allocate budgets well in advance to minimize last-minute chaos. Additionally, clear and frequent communication with residents is paramount. This will help to provide transparency and dissuade resident frustration. Look for areas in your process that take the most time, and see if there’s potential to automate those tasks. This will be a huge time-saver for your team when turn-season comes around. The truth is, that turn-season preparation is a year-long process. By working at resident satisfaction throughout the year, property management may see higher retention rates by lease-end. Lower turnover ultimately results in less stress during peak turn season.

4. Digitize the Payment Process

Payments and billing also have unique considerations that a typical multifamily residence does not encounter. As mentioned earlier, the average student renter is in their early 20s and lacks financial history and experience, significantly impacting the rental process. Many of them have little to no credit and therefore require a co-signer by way of a parent or guardian to help secure a lease. Not only are the parents or guardians co-signing the lease but they are also the ones making the payments on behalf of the student. There is also the additional complication of “by-the-bed” leasing as student housing is often designed for a roommate(s) situation. All of these leasing nuances add complexity to the payment process that student housing operators need to manage.

Strategy:
Understanding the special cases around student renters is paramount in ensuring both residents and property managers enjoy a seamless payment process. Taking into account the potential of a co-signer or guarantor, student housing management might employ a digital payment solution to streamline the rental payment process. Digital payment portals allow residents and their supporters to review bills and manage payments easily. And by leveraging a digital solution, renter parties and property operators can also benefit from communication features. This allows for questions and requests to be processed efficiently, minimizing resident frustration and confusion. By giving ownership and convenience of payments to both the renter and their support party, student housing property managers safeguard their rents, increase resident satisfaction, and enjoy a streamlined, easy-to-manage system.

5. Automate Manual Administrative Tasks

In addition to streamlining rental payments as discussed above, there are other opportunities to minimize lift on student housing management. While the turn marks the year’s most chaotic season for student housing, on-site staff must still deal with maintenance requests, payments, billing, pulling reports, and other manual tasks throughout the year. Managing these cumbersome and manual workflows is not only time-consuming, it’s expensive. When looking at multifamily property management, staff’s handling of back-office and resident operations throughout the year totaled a staggering 156 hours monthly and over $65,000 annually. While not specific to student housing, this data reflects the sheer amount of time and dollars spent on manual operations in property management.

Strategy:
These days, it’s important to eliminate manual tasks that place strain on staff resources. This is especially crucial when turn-season comes around. During the busiest time of the year, staff find themselves facing a mountain of tasks while also addressing resident needs. This stressful balancing act leaves cracks in your team where mistakes can fall through. The easiest way to combat unnecessary strain on your staff is by automating areas of your operations. From utility billing to communication barriers, much of the most tedious property management functions can be lifted off your team through the use of software and technology. We recommend you take note of your current workflow. Find tasks that can be streamlined, such as payment processing, and research options for student housing properties. Continually accessing and adjusting your current processes allows you to automate where needed, freeing up time for your staff and protecting your property from ineffective operations.

6. Bill Students for Utilities Based on Consumption

One of the most complex aspects of student housing is utility expense management. Utility billing challenges arise within student housing due to this portfolio type’s unique accommodations. Implementing a cookie-cutter approach won’t be effective. Challenges can stem from an inability to track and determine consumption, irresponsible energy usage, and lack of billing transparency, to name a few. For the resident, this can lead to confusion and frustration with the property management company.

Strategy:
We recommend that student housing property managers bill units by consumption. They can achieve this by implementing submeters or employing the use of a Ratio Utility Billing System (RUBS), which calculates consumption based on custom property criteria. RUBS is a cost-effective alternative to submetering and can be tailored to meet the needs of a specific property. By adopting consumption-based billing, student housing property management can better track utility usage and are less likely to over or under-charge residents. What’s more, this approach can be adjusted to accommodate “per bed” leasing. Maintaining a tight grasp on consumption enables property managers to better recoup costs and protect revenue.

To minimize risk of disputes on utility charges, maintaining open, active communication with the resident is crucial. Bill transparency goes a long way in decreasing the potential for confusion and disagreement. A solid utility management system can automate all these processes for you, from calculating consumption to laying out charges. These personalized utility management services help automate the workflow while securing transactions and providing two-way transparency.

7. Prioritize Effective Sustainability Initiatives

Increasingly, modern-day students express concern about the environment and look towards institutions that practice sustainability. This expectation extends to their housing options. What’s more, poor sustainability not only negatively impacts the environment – it can damage revenue. One common utility mistake we see property management professionals make is maintaining inefficient building features that encourage energy and water waste. With residential consumption up 10% in recent years and utility rates rising, this can be detrimental to NOI. Therefore, effective sustainability measures benefit both residents and property managers.

Strategy: 
Property managers should prioritize effective sustainability measures to address residents’ growing environmental concerns. The first step is identifying faulty building features that contribute to energy and water waste. These inefficient systems negatively impact the environment, but they also lead to lost revenue. Some solutions include installing energy-efficient appliances, water-saving fixtures, and implementing renewable energy sources where possible.

Tracking utilities by consumption as explained in the previous point is another fantastic way to help the environment. When billed by consumption, residents are less likely to take advantage of utilities and over-use. This puts the plug on wasteful behavior, safeguarding your revenue as a bonus.

Finally, encouraging eco-friendly practices to residents ensures everyone is doing their part. Property managers can implement community-wide recycling programs, offer educational events and activities, and open communication channels to discussion and feedback. Adopting sustainable measures positions your property as an attractive student housing option while saving you resources and revenue.