NMHC Releases 2012 Income/Expense Benchmarks for Student Housing

By NMHC -

September 25, 2012

WASHINGTON, D.C. – September 25, 2012 – (RealEstateRama) — As college and university enrollments have grown almost 40 percent in the past decade, squeezing schools’ supply of on-campus housing, demand for private, off-campus student housing options is growing. Responding to that trend, the National Student Housing Council (NSHC) and the National Multi Housing Council (NMHC) today released their 2012 Off-Campus Student Housing Income and Expense Benchmarking Survey. The only such survey specifically targeting the off-campus student housing sector, it includes data on 370 properties from 25 companies in 46 states.

Key findings include:

As found in previous studies, off-campus student housing properties are continuing to lease predominantly “by-the-bed,” with every student in an apartment responsible for his or her own lease. Properties in this survey that leased by-the-bed reported earning less per bed in rental income and spending larger percentages of their rental income on operating expenses than properties that lease by-the-unit, but this may be due to product mix (by-the-unit properties typically have two or more beds per unit). It is interesting to note that prior studies have shown that on a per property basis, more income is derived at properties that rent by-the-bed.
Late-fee income varies tremendously by property. For example, late-fee income ranged from $13.41 to $110.61 per bed for mid- to high-rise properties that leased by-the-bed. However, for garden-style properties that leased by-the-unit, late-fee income ranged from $22.26 to $114.26 per bed. A property’s location also factored into the late-fee income averages.

Data is provided by type of leasing structure; the report also breaks out the data results by property age, property type, property size and ownership/management structure. In addition to the general results, which provide the full aggregate data for all 46 states, the survey includes select regional results and state-level data for Alabama, Florida, Georgia, Indiana, Michigan, North Carolina, Ohio and Texas.

The survey report is given complimentary to all attendees at the upcoming NMHC Student Housing Conference & Exposition, October 1-2 at the Arizona Biltmore, Phoenix, Ariz. Conference registration information is available at: http://www.nmhc.org/goto/SHC12reg.

It is also available for purchase by both NMHC and NAA members ($750) and nonmembers ($1,500). NMHC also offers a student housing research package, which gives purchasers access to all of the NMHC and NSHC annual student housing research reports. NMHC and NAA members pay $1,700 and nonmembers pay $2,500 for the package.

Sample tables showcasing the report’s percent of rental income and dollars per bed analysis are below:

Expenses as a Percent of Rental Income Properties Built 2006-Present in Midwest Region
	10^th Percentile	50^th Percentile	90^th Percentile	Average
Rental Income	100.0%	100.0%	100.0%	100.0%
Total Operating Expenses	34.2%	57.1%	71.5%	54.5%
Total Compensation	6.2%	10.8%	18.8%	12.1%
Maintenance and Repairs	3.1%	4.3%	9.4%	5.0%
Taxes	2.5%	7.6%	21.5%	9.9%
Insurance	0.7%	1.3%	2.0%	1.3%
Marketing	0.8%	2.1%	4.5%	2.2%
Turnover	0.4%	1.7%	2.9%	1.6%
Utilities	4.3%	9.0%	18.2%	10.2%
Late-Fee Income	0.1%	0.8%	1.7%	0.8%

Note: Figures are a percent of net rent and do not include other income in the denominator. (n=18)

Expenses Shown in Dollars Per Bed Properties Leased By-the-Unit in the South Region
	10^th Percentile	50^th Percentile	90^th Percentile	Average
Rental Income	$4,699.45	$6,552.85	$7,780.95	$6,198.51
Total Operating Expenses	$2,425.97	$3,015.12	$4,244.26	$3,102.01
Total Compensation	$520.54	$636.22	$956.32	$697.56
Maintenance and Repairs	$129.90	$242.37	$433.23	$252.41
Taxes	$296.14	$534.44	$748.96	$532.04
Insurance	$95.55	$121.69	$180.70	$133.25
Marketing	$106.54	$154.32	$281.21	$173.21
Turnover	$149.88	$195.39	$313.31	$210.10
Utilities	$133.09	$359.49	$659.57	$386.32
Late-Fee Income	$24.45	$54.78	$107.33	$51.55

Note: Figures are per bed. (n=35)

For more student housing information or resources, please visit www.nmhc.org/goto/studenthousing.

NSHC is a subsidiary of NMHC.

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NSHC was formed in 2011, nine years after NMHC launched the first-ever student housing conference, and serves to encourage information exchange and conduct research to help inform the investment decisions and best practices off-campus student housing developers. Based in Washington, D.C., NMHC is a national association representing the interests of the largest and most prominent apartment firms in the U.S. For more information, contact NSHC at 202/974-2300, e-mail ">, or visit NSHC’s web site at www.nmhc.org/goto/StudentHousing.