A Surge in This Industry Is the Perfect Recipe for Investors

With college attendees increasing, student housing should see significant growth.

During the pandemic, college enrollments dropped sharply, but recently, there has been a big wave of applications. In a video clip from “Ask Us Anything” on Motley Fool Live , recorded on Feb. 28 , Fool contributors Matt Frankel, Dan Caplinger, and Nicholas Rossolillo answer a member’s question about American Campus Communities ( ACC 0.15% ), the largest student-housing business in the country. Video Player is loading. Play Video

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FullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button. Where to invest $1,000 right now Before you consider making any real estate investment, you’ll want to hear this.Our team of real estate experts and analysts at The Motley Fool just revealed what they believe are the top 5 best REITS under $49 for individual investors right now… and they’re giving the report away for free.Over the last 20 or so years, REITs have consistently outperformed the regular stock market. And with the recent release of our top 5 favorite REIT investments right now, we believe it’s an ideal time to get invested. Matt Frankel: Sure. A few points about that. One, college enrollment dropped during the pandemic. There are about a million fewer college students in the United States than there were before the pandemic. Applications are rebounding sharply. A lot of students decided to say take a gap year in 2020 because they couldn’t be on campus at all or things like that. We just saw the data from 2021 and college applications for the 2021-2022 school year were up 19.8% over pre-pandemic levels. Not just over the slowdown pandemic year, but over the 2019 school year.So college applications are rebounding, they’re expecting more of the same in fall 2022. Not only that, new supply of student housing is expected to be at its lowest level in over a decade in 2022. So you’re getting the surge of college applications. You’re getting the slowdown in construction due to supply chain disruptions, materials, costs things like that. Those are a great recipe for growth in the industry. Beyond that, don’t worry too much about hybrid and online education, which a lot of people are when it comes to the student housing industry.I’m pretty sure there are people on this call who are closer to college-age than me. But having said that, a lot of people want to take college classes online, they don’t want to live with their parents while they’re doing it. There’s no desire by the nation’s college sophomores and juniors to go live at home to take online classes. Online classes weren’t a thing when I was in school. I would’ve gladly enrolled in a schedule of classes I could’ve taken from my apartment near campus. I wouldn’t have wanted to live in my parents’ house to do it. That’s one big thing people are missing.I’m very bullish on the student housing industry long-term, and the pandemic really just showed the value of purpose-built student housing as opposed to living on-campus, the traditional option, because these purpose-built facilities didn’t close when the pandemic hit. They didn’t kick the students out. They don’t close over college breaks. They don’t make the students go home. People still had freedom to move about the building during the pandemic. It was a lot more freedom, a much more desirable living environment, and really it underscored the value of that option.I like American Campus Communities more than I did before the pandemic. I’ve added to my position several times in the past year or so, and the recent earnings from the company are fantastic. So I’m a big believer in student housing. I don’t know if any of the younger guys on the call have any other thoughts on it. Dan Caplinger: Here I was about to weigh in. Frankel: Oh, no. Go for it. Go for it. It’s OK. Caplinger: I don’t count as a younger guy here. Frankel: Young at heart. Caplinger: I mean, I will be the first to agree. The […]

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