The private student housing sector is booming as student enrollment grows along with a preference among students and parents for an upscale living experience. The National Multi-Housing Council’s (NMHC) National Student Council surveyed 56 universities and found an average 20 percent growth rate in freshman applications for the fall of 2010, compared to fall 2008.
Growing student populations bring growing opportunities for the private student housing sector including a boost for rents and operating incomes. CORT, a Berkshire Hathaway company and the only national provider of furniture rental, is partnering with private student housing developers and managers to provide sought-after furnished housing.
Students and parents are seeking upscale student housing
Approximately 50 percent of higher education students will choose to live off-campus and many of them will prefer to lease furnished apartments. By renting furniture, apartment communities can respond to the interests of a growing audience of prospective residents while preserving the option to adjust furniture inventory based on current and future needs.
Off-campus housing appeals to students and parents seeking the comforts of home in student housing, and is a necessity for other students seeking an alternative to on-campus facilities that are at capacity or under renovation. Many off-campus properties deliver a full array of amenities including a private bedroom and bathroom which deliver the standard of living students have known at home.
Furnished apartments are one of the most popular solutions to attract student residents. CORT helps housing developers and managers provide these amenities while assuming the cost and burden of furniture management.
Keep property managers focused on the community, not furniture
Managing furniture requires a significant investment of time and money for apartment communities. In addition to the initial cost to purchase furniture for apartments, there are hidden costs associated with managing furniture, as well as the opportunity cost to store furniture in empty units that could have housed residents.
When an apartment community purchases furniture, they cannot predict future occupancy levels and demand. It is nearly certain that at some point they will have more furniture than necessary and will need a storage solution. In some cases, the only option property managers have is to store furniture in units instead of accepting more residents, costing the property potential revenue. Once the furniture is needed again, staff time must be spent moving furniture that could have otherwise been spent helping current residents or marketing the property to attract new residents.
Furniture rental gives apartment communities a solution that can rapidly scale to match rising demand. In addition, furniture rental allows off-campus housing providers to rely on a trusted partner to manage an inventory of furniture while focusing their efforts on leasing and marketing student housing communities. Property managers should select a furniture rental partner offering full furniture management programs including prompt service for repairs and replacements and an annual inspection in advance of the upcoming student enrollment cycle.
Private student housing developers are challenged to maintain the appeal of a property after it has been in operation for a few years and lost its distinction as the newest option for students. By outsourcing the delivery, maintenance and replacement of furniture, property managers can be confident each student will enjoy a fresh unit and the living experience necessary to drive a continued positive reputation for the property. In addition, property managers will enjoy the peace of mind that comes from knowing professionals movers, not students and parents, are responsible for moving furniture in and out of freshly painted hallways.
In an environment where individual influence is amplified through digital media, a positive property reputation generates greater property revenues and a higher ROI, while a negative reputation can have a detrimental effect. From online reviews and social networks to conversations after class or on the weekends, a positive reputation is critical for a property to enjoy sustained success.
Furniture rental also benefits communities offering unfurnished apartments
Another critical element to consider when furnishing student apartments is that, while furnished apartments are often the most convenient choice, some students will prefer an unfurnished apartment and other communities may choose to offer unfurnished housing.
Whether or not an apartment community chooses to offer furnished or unfurnished units, CORT can be a partner to offer residents customized furniture packages to meet individual needs and preferences. For example, a property can offer a furniture option included in a resident’s monthly rent or simply refer students to CORT in exchange for a portion of the revenue from resulting leases. Students can pick out exactly which furniture package best suits their needs and count on their furniture rental provider for delivery and setup.
Providing the option of furnished or unfurnished apartments and allowing the resident to pick out exactly what type of furniture they prefer helps apartment communities offer students the utmost in upscale living without the burden of furniture asset management and a costly investment in purchased furniture.
The student housing industry has evolved into a robust market with promising potential for continued growth. Students and parents want more out of their living experience, and are willing to pay a premium for high quality housing. Furniture rental enables property managers to offer one of the most sought after amenities, furnished housing, while leaving the burdens of furniture asset management to the experts. As property managers are relied upon to retain and attract residents, working with a trusted furniture rental partner can be critical factor for continued success.
— Mark Koepsell is a Senior Vice President of New Business Development with CORT.