Student Housing Income and Expense Survey Shows Northeast Spends Less On Operating Expenses

Washington, D.C.—The National Multi Housing Council’s National Student Housing Council (NSHC) recently released its “Off-Campus Student Housing: 2011 Income and Expense Benchmarking Survey.”

The survey expands on last year’s, having added additional regional information and coverage of nine states: Alabama, Arizona, Florida, Georgia, Illinois, Indiana, North Carolina, Ohio and Texas.

Survey results are based on data from 29 companies in 32 states, covering 341 properties (195,923 beds). It offers information on total operating expenses, compensation, maintenance and repairs, taxes, insurance, marketing, turnover and utilities.

The report finds that, on average, 53.6 percent of the rental income from student housing is spent on total operating expenses with 11.9 percent on total compensation, 5.2 percent on maintenance and repairs, 9 percent on taxes, 1.9 percent on insurance, 3 percent on marketing, 2.4 percent on turnover, 11 percent on utilities and 1 percent on late fee income.

These percentages varied slightly when by-the-bed properties were compared to by-the-unit properties. For example, in by-the-bed properties (of which 294 were surveyed), 54.4 percent of the rental incomes is spent on total operating expenses, compared to 48.4 percent for by-the-unit properties (of which 47 were surveyed).

Broken down further, in by-the-bed properties, 12 percent accounted for total compensation, 5.2 percent for maintenance and repairs, 8.9 percent for taxes, 1.8 percent for insurance, 3.1 percent marketing, 2.4 percent for turnover, 11.8 percent for utilities and 1 percent for late fee income. Meanwhile, in by-the-unit properties, 11.3 percent of the rental income is spent on total compensation, 4.8 percent on maintenance and repairs, 9.6 percent on taxes, 2.2 percent on insurance, 2.4 percent on marketing, 2.7 percent on turnover, 6.1 percent on utilities and 0.8 percent on late fee income.

Based on age, total operating expenses were just slightly lower for those properties built 2003-present (52.3 percent, compared to 54.1 percent for properties built 1998-2002 and 54.6 percent for properties built 1997 and before). Compensation was higher for older properties, at 14 percent of expenses, compared to 10.9 percent and 11 percent, respectively, for properties built 2003-present and properties built 1998-2002. While turnover cost the same for all properties built up until 2002 on a percentage basis (2.8 percent), newer properties saw just 1.9 percent of expenses spent on this line item.

On a regional basis, the Northeast spends considerably less on total operating expenses—39.5 percent, compared to 56.6 percent in the Midwest, 53.9 percent in the Southwest, and 54.1 percent in the Southwest.