Keeping It Mobile
Student housing has evolved significantly in the last decade as purpose-built, professionally managed properties have become standard and institutional capital has raised its profile.
By Diana Mosher
Student housing has evolved significantly in the last decade as purpose-built, professionally managed properties have become standard and institutional capital has raised its profile. In an increasingly competitive field, success takes more than resort-style swimming pools and edgy interiors. Understanding what matters to 17 to 24 year olds is key to winning and keeping their business.
Today, nothing symbolizes the new era of student housing lease management like the smartphone. College students are devoted to the device, of course, but it also reflects the tech know-how, flexibility and ease of communication required to manage leases. From an initial inquiry from a prospective resident to online payment and service requests, systems and procedures must be tuned to a digital channel during the entire lifecycle of a lease, asserted Miles Orth, executive vice president & COO at Campus Apartments.
“Some operators may not be as technology savvy, but the students are—and they drive and push that as a demand,” noted Dave Borsos, vice president for capital markets at the National Multifamily Housing Council and a spokesperson for NMHC’s Student Housing Council.
Remaining on the cutting edge is a top priority, as well. “We’re using technology that allows us to connect with students on their mobile devices and through their favorite social media platforms,” said Jennifer Fraser, Greystar Student Living’s senior director for real estate. Digital tours via FaceTime and videos are popular ways for students to preview a community’s amenities and lifestyle.
When students engage with housing providers via social media channels, they want to be able to easily connect with a guest card, inquire about a lease and find out everything else they need to know via their mobile device, Orth noted.
“Our prospective residents are all mobile, all the time, and so (when they do want to visit us) our leasing center has to reflect that preference,” he explained. His leasing teams use tablets to engage customers when they walk in the door, and offer virtual reality tours, whether in face-to-face meetings with prospects at housing fairs or remotely via the company website.
Indeed, virtual reality is a game-changer for student housing because of its unique pre-leasing requirements. In contrast to the year-round efforts characteristic of other multifamily categories, leasing student housing focuses on signing up students for the next school year.
“You have a very specific window during which you need to manage your leasing operations, and you need to manage them very effectively,” Borsos explained. “If you hit the start of the school year and you haven’t leased up, there’s a good chance you’re not going to fill any more beds, simply because kids have already identified where they’re going to stay.”
This applies especially to pre-leasing properties that are still under construction or are undergoing renovation. Unless the pre-leasing campaign is timed right, the property could stay vacant for the entire year. “It’s really important to give parents and students an idea of what the asset will look like,” Orth said.
New monetary medium
While colleges measure time by the semester rather than the calendar year, most student housing operators use a 12-month lease structure. “A student could have the right to occupy that unit during a time frame they’re not in school. But student housing operators are getting a 12-month lease, so that’s the important capture,” Borsos said.
That said, entrepreneurial owners will lease properties for the academic year or even for a semester if the market demands it. “An operator might offer that for a premium versus just discounting the time,” Orth explained. Good operators, he noted, incorporate language in their lease agreements to prohibit residents from creating an undocumented sublet.
Campus Apartments’ standard 12-month lease mandates individual liability. If three students rent a three-bedroom apartment, each one is responsible for his or her share of rent and utilities. “Students really value individual lease liability, and Mom and Dad value it, as well,“ Orth pointed out. “When we sign the lease, we’re doing a criminal background check on that resident and credit check on a guarantor.”
Sterling University Housing, part of the Dinerstein Cos., looks at the guarantor’s rent/earnings ratio and requires an income four times the monthly rent, at least 12 months’ rent in an accessible bank account, and a non‐criminal
“Operators are leveraging as much technology as possible and shying away from collecting (rent) using checks or cash. There’s really a shift away from that type of monetary medium,” Borsos reported. One common method is an automatic debit linked to a student or parental bank account. PayPal can be yet another option.
“Lots of students are already very familiar with using their phones to pay for things, and there are (operators) that leverage this ability,” noted Borsos.
Those operators allow payment by phone, but only through business-to-business online services like PayPal or Apple Pay. Options offered by Sterling include ACH transactions, credit cards and online payment, which come with service fees.
Most residents at communities managed by Greystar Student Living choose to pay online. “Residents appreciate the convenience,” Fraser explained. “They also have the option of visiting their on-site leasing office for any assistance regarding payments.”
Important as they are, these strategies are most effective when they include the human touch. Every move-in day is also the first day of next year’s pre-leasing drive, so never underestimate the power of a friendly smile or helpful interaction with the resident.
Originally appearing in the June 2017 issue of MHN.