The answer is simple. It is a Goldmine for those who know what they are doing and a headache for those that don’t. This comes down to buying correctly and effective property management.
Student housing yields a higher Net Operating Income (NOI) then a single-family rental would. This is because rent is usually charged per room and not unit.
It is important to purchase a home that is in a great location. It should be a 5-10 minute walk to campus or by a transit line that goes directly to campus. If it is not it will be harder to rent out thus resulting in more vacancies.
I like properties that need some cosmetic renovations as you can get a good deal on them and that allow me to renovate the property to suit students. There is a misconception that students will live almost anywhere as long as its cheap. I find the nicer student houses even if they cost a little more, are more desirable to students and they are willing to stay throughout their undergrad as opposed to moving every year.
Maintaining low vaccines is one way to eliminate a headache another is to manage effectively. I could write a series of posts about of effective management but when it comes to student housing it is important to manage expectations. It should be spelled out in the lease what you expect from the tenants and what they can expect from you. You want to make it clear that you expect the property to be kept in good condition and clean and any problems should be reported to you right away. You want to also establish a system for responding to problems and not have the tenants think they can all you at 11pm if it is not an emergency.