Student Housing Cap Rates: Purpose-Built Off-Campus Housing
Student housing cap rates run about 5.5% to 6.5% nationally, averaging near 6.1%. How by-the-bed leasing and pre-leasing affect NOI, and value at each cap rate.
By the CapRateCalculator.co team
Student housing cap rates run about 5.5% to 6.5% nationally. Capright’s September 2026 student housing update gives that range, with the spread driven by property quality and distance to campus. Walker & Dunlop put the average near 6.1% through 2025, down from 6.35% in mid-2024, and expects rates to level off with mild expansion.
Student housing cap rate figures
| Measure | Cap rate | Source |
|---|---|---|
| National range | 5.5% to 6.5% | Capright, September 2026 |
| Average through 2025 | About 6.1% | Walker & Dunlop |
| Average, mid-2024 | 6.35% | Walker & Dunlop |
Value at student housing cap rates
| Cap rate | Value of $2,000,000 NOI |
|---|---|
| 5.5% | $36,364,000 |
| 6.1% | $32,787,000 |
| 6.5% | $30,769,000 |
How student housing NOI is different
Purpose-built student housing usually leases by the bed. A four-bedroom unit has four separate leases, often with parental guarantees. Leases run for the academic year, so most of the building turns over at once, and the leasing season for next fall decides the coming year’s income.
That makes pre-leasing the number to watch. A property that is 90% pre-leased in the spring for the fall is in a very different position from one at 60%. Expenses run higher than in conventional apartments because units are furnished, turnover is annual and many properties include utilities and internet in the rent.
What moves a student housing cap rate
Distance to campus. Walking distance to the center of campus is the biggest single factor.
The university. Large schools with growing enrollment support lower cap rates. Schools with shrinking enrollment carry more risk.
Age and amenities. Newer buildings with study space and fitness rooms lease first and trade lower.
Supply. New beds near campus compete directly for the same students each fall.
For a property still filling up, use a stabilized cap rate on the occupancy it can hold. The multifamily cap rates guide covers conventional apartments, and cap rates by property type has the full comparison.
Source: Capright, Student Housing Market Update, September 2026.
Frequently asked questions
What is the cap rate for student housing?
Capright's September 2026 update puts purpose-built student housing between about 5.5% and 6.5% nationally, depending on quality and distance to campus. Walker & Dunlop put the average near 6.1% through 2025, down from 6.35% in mid-2024.
Why do student housing cap rates differ from apartments?
Students lease by the bed for one academic year, so almost the whole building turns over each year and income depends on a single leasing season. Furnished units and higher wear add costs. Buyers usually want a slightly higher yield than for a similar conventional apartment building.
What makes a student housing property trade at a lower cap rate?
Walking distance to campus, a large and growing university, strong pre-leasing for the coming year and newer construction. Properties far from campus at schools with flat enrollment trade at the high end.