Student housing operators are raising the expectations that renters have for their bundle of apartment amenities.
Young renters, many of them recent college grads, account of the lion’s share of the rental market in the U.S. A recent report by Pew Research noted that 65% of households headed by people younger than 35 were renting rather than owning, with no plans to buy in the foreseeable future.
Students eventually graduate and take their amenity expectations with them
When younger people move from living in amenity-filled student housing units to apartment living, their expectations for amenities move right along with then. One of the top amenities that student housing operators provide is free internet.
It’s perfectly logical for young renters to expect that when free internet is at the university, it should also be one of the free amenities they receive as an apartment renter.
As the number of rental households in the U.S. continues to grow it’s no surprise that apartment operators are offering a widening array of amenities to attract tenants to their buildings instead of the competition’s. It’s quite likely that free internet will be one of those amenities.
Pay TV loses its lust
A recent article in the Wall Street Journal notes that more than 1 million subscribers cut the cord – which is a nice way of saying they canceled their service – in the past three months alone. That’s one of the biggest decreases in subscriber count ever and it’s causing pay TV operators to scramble and find new distribution channels to make up for lost revenue.
Offering free internet in the apartment amenities package goes hand in hand with the cord cutters who increasingly prefer to receive their entertainment online and it’s a win for the apartment landlord because offering free internet meets the expectations of younger tenants and should ultimately lead to higher occupancy and rental income.
What other student housing amenities will apartment landlords embrace?
We’ve previously written about why the growth in the multifamily market is a trend that is unlikely to end any time soon.
While almost all other commercial real estate asset classes are seeing declining loan volumes, multifamily loan originations are growing by double digits. This year and next, rents are forecast to rise by an average of 4% each year while vacancy levels over the next several years should stay relatively flat at about 6.5%.
Enviable returns like these are attracting more capital to the multifamily sector. More investment and more product coming to market means more competition, and a rising array of amenities offered by apartment landlords to attract tenants.
Four key student housing amenities that apartment landlords might embrace next are:
- Digital fitness
- Increased outdoor space
- Tech-equipped coworking space
- Keyless door entry
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