Understanding why high-net-worth investors love student housing

September 17, 2018 by Kelton Corcoran

About the author

Kelton Corcoran

Senior content marketing specialist

Kelton Corcoran is a senior content marketing specialist at NaviPlan, the financial planning technology provider of choice for more than 140,000 financial professionals.

As an advisor, understanding how clients think about money is essential to not only provide good advice but also to attract new clients. This is especially true for high-net-worth (HNW) clients, who tend to look at certain factors when making investments or other financial decisions.

According to a recent article on WealthManagement.com, one investment that HNW clients have been highly attracted to lately is student housing. Even if you don’t plan on specifically suggesting this as an investment option to clients, understanding the factors that make the opportunity so attractive can help adjust your strategy when appealing to HNW clients.

Let’s take a look at two of these factors and how they portray the preferences of HNW clients:

Stability in Demand

A strong positive of student housing is that it’s both stable and predictable. Throughout market volatility, the demand for student housing remains consistent and may even rise as more people return to school during times of economic downturn. Also, lease renewals are easier to predict than normal residences since students need housing at the same time each year.

This shows the risk-averse nature of HNW clients. They already have a well-established wealth and want to avoid overexposing it to market fluctuations. They seek planning, saving, and investment options that will protect their wealth over time. Advisors should keep this in mind when building financial plans and suggesting complementary services.

Unique Profits

Stable, predictable investments will typically yield smaller profits, but this isn’t the case with student housing. Landlords are able to charge student renters more per square foot thanks to them splitting costs with a group of roommates. Compared to normal renters, students are also more likely to be on time with their payments due to financial assistance from parents.

These unique profits show the desire for HNW investors to uncover creative financial strategies. Often, they are well aware of the standard services and strategies that work for others but are hoping to implement something more specific to their wants and needs.

Whether you’re an advisor looking to appeal to more HNW prospects or simply looking to increase revenue from current clients with add-on services, these factors should be considered when determining your offerings.

To learn how a financial planning and wealth management firm increased revenue, reduced expenses, and nearly doubled conversion rates using NaviPlan, click here.