Investing in a student residence: A complete guide

The student housing market in France is constantly growing in intensity: while demand is exploding and the supply remains structurally limited, investing in this segment is a path of choice for investors wishing to combine yield, security and simplified management. In this 2025 guide, we guide you step by step to understand why and how to invest in a student residence, what mistakes to avoid, and what investor profiles can take advantage of them.

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1. Why invest in a student residence?

In this first part, we will explore why investing in student residences is an attractive option. We will look at the unique strengths of this sector and how demand and management contribute to its performance.

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The advantages of student investment

Investing in a student residence makes it possible to capitalize on an asset with several advantageous facets: returns that are potentially higher than the average for traditional rentals, reliable management via a commercial lease signed with an operator, and a tenant profile that is often more stable than in other types of rentals. In practice, some observers estimate that the net return of a well-placed student residence is between 4% and 6% in 2025. (Source: Pitcher)

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Rental request & simplified management

The strength of such an investment is also based on sustainable rental demand: in France at the beginning of 2025, nearly 430,000 beds are operated in approximately 2,900 student residences. (Source: Financing card)

Faced with this limited stock, the vacancy remains low. In addition, management is delegated to a professional operator: the investor does not have to directly manage tenants, input-outputs or unpaid bills, which reduces the operational burden.

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2. The reality of the student market 2024-2025

To fully understand this opportunity, it is essential to rely on the most recent market figures. This section highlights key data on supply and demand and then looks at the returns observed by geographic area.

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Key supply and demand data

The student housing market is showing clear growth. According to a study, France recorded an investment volume of 691 million euros in the first half of 2025, representing nearly 37% of total residential volumes. In addition, the average budget devoted to housing by a student is 693€/month in 2025 (855€ in the Paris region). These indicators confirm a lasting imbalance between rising demand and supply that is struggling to keep up.

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Observed yields by zone

Returns vary greatly depending on the location and quality of the asset: on average, according to a comparison, the return of a student residence is between 3% and 7% Net.
In the most attractive areas (large university cities), we can aim for a high amplitude (5-6%), while in medium-sized cities or on the periphery, we are more likely to be around 3-4%. The difference is explained in particular by the attractiveness of the city, the number of foreign students, the proximity of campuses and the quality of the services provided.

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3. Investor profile: which one are you?

In this section, we identify four types of frequent investors in student residences: each profile has its own objectives, constraints and success criteria. This reflection allows you to choose a strategy adapted to your situation.

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The student's parent

You want to secure housing for your child while generating a return: investing in a student residence can meet two needs at the same time. You benefit from outsourced management thanks to the commercial lease, and you anticipate the entry of your child into higher education with ready-to-live accommodation. This profile focuses on simplicity and long-term profitability.

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The beginning investor

With a reasonable initial budget, often a studio or a one-bedroom apartment, this type of investment allows you to take your first steps in rental real estate without managing the tenants yourself. You are looking for a “turnkey” asset with little operational management, stable returns, and long-term visibility.

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The international investor

Living abroad or with international mobility, you are looking for an investment solution in France that works without your active presence. The student residence, through a local operator, fulfills this role: you invest, receive rental income, and the operator manages the daily aspects. “If you are an investor abroad, see our article Buying a property in France from abroad.”

Professional mobility

You are often transferred or you change regions for professional reasons: in this context, a student residence can be a profitable asset without you having to worry about rentals, vacations or services. You choose a property, delegate, you secure rental income while remaining flexible. “For a focus on professional mobility and remote investment, see”Geographic professional mobility: advantages and challenges“.

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4. How do you choose the right student residence?

The choice of the property is decisive for success. In this section, we detail the essential criteria: location, services, management to select a student residence that is profitable and sustainable, and not only attractive at first glance.

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Location: a key criterion

Location is still the number one success factor for this type of asset. It's not just about being “in a student city.” You have to check several boxes: a large student population, a neighborhood close to schools, public transport, and a low supply of student housing.

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For example, at the beginning of 2025, France had around 2,900 residences and 430,000 beds exploited, but that still only covers a small fraction of the nearly 3 million students expected.

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In investment studies, we note that residences that are well located near a campus or university center have an occupancy rate greater than 95% in some metropolises.

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On the other hand, an investment in a city with low student attractiveness, or in a poorly served periphery, can quickly lead to a longer vacancy, lower rents and degraded profitability. It is therefore crucial to check the local dynamic, the growth in the number of students, and the current competition.

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The services offered in the residence

Students are no longer just looking for accommodation to live in: they want a pleasant living environment. This is why there are residences with services such as: high-speed connection, coworking spaces, laundry room, gym, concierge, bike room, etc., stand out. This type of services makes it possible to increase attractiveness, justify a higher rent, and limit the vacancy.

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For example, according to a specialized platform, the net profitability of a well-equipped student residence property is between 4% and 6%, compared to lower returns in standard residences.
In addition to performance, these services contribute to a “residential experience”: they reinforce the image of the residence and can even facilitate resale. When homes are connected, well-maintained and equipped with additional services, “safe” occupancy rates are maintained despite competition.

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The manager & the commercial lease

The quality of the operator and the solidity of the commercial lease make all the difference. In this type of investment, you often sign a long commercial lease (often between 9 and 12 years) with a manager who ensures the payment of rents, even in the event of a vacancy, and takes care of rental management, maintenance and sometimes expenses.

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Studies show that the average net return for this type of asset is around 3% to 4% in the case of a classic commercial lease, but may amount to 5% or more in the right conditions.

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A bad choice of operator: lack of experience, poorly filled portfolios, poor network or a poorly written lease (no rental guarantee, unfavorable indexation clauses, distribution of major works at the expense of the lessor) can cause profitability to fall. In addition, commercial leases can limit the increase in rents over time or impose too high a rent at the start, which can affect overall attractiveness.

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Therefore, check:

• the seniority and references of the operator,
• the historical occupancy rate of the residences it manages,
• lease terms: duration, rent guarantee, indexation, indexation, charges, major works, exit options.

A good manager + a well-structured lease = secure return + less intervention on your part.

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5. Comparison: student residence vs traditional student housing vs shared accommodation

To properly assess your investment strategy, it is essential to clearly compare the different formats available. Three options stand out: managed student residences, traditional student housing, and student roommates. Each has its advantages, its constraints and its potential returns.

This table allows you to clearly see which option best fits your profile, your objectives and your management capacity.

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6. Common mistakes & pitfalls to avoid

Investing in a student residence may seem secure, but like any investment, it involves risks: local, contractual, financial. Anticipating the most frequent mistakes well makes it possible to optimize profitability and to secure your project.

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Inadequate location

Location is the first factor of success: investing in a city without a campus or in an underserved neighborhood can quickly degrade returns. For example, some investments in secondary university cities saw net returns fall below 2% when supply exceeded demand.

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In 2024, some private residences had an occupancy rate of less than 91% in medium-sized cities, compared to up to 94% in better positioned university cities.

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To avoid this pitfall, check that:

• the city has a significant number of students and active university programs,
• there is a structural deficit in student housing in the zone,
• the property is close to transport, university infrastructure and services.

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Unreliable manager or poorly negotiated lease

Investment in student residences is often based on a commercial lease signed with an operator for a long period of time (9 to 12 years). In the event of a failure of the latter or unfavorable clauses (unguaranteed rent, transferred charges, etc.), the owner may find himself without a stable income. According to an analysis, this type of contract may contain clauses exposing the investor to conditional rent or additional costs.

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A concrete case: a property acquired in a student residence in 2023 with a commercial lease from a manager with little experience experienced 12 months of vacancy following a change of manager, causing a net loss in rent and a profitability that fell to less than 2%.

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To secure your investment, be sure to:

• examine the financial health of the manager, his historical occupancy rate and his services provided,
• read the commercial lease carefully (rental guarantee, duration, revision conditions),
• favour a recognized operator.

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Underestimation of ancillary costs

Even in a high-demand segment, fees can significantly eat into profitability. Among them: local taxes, condominium fees, maintenance, furniture, services offered, upgrade work. A specialized publication points out that unexpected costs and unexpected work have reduced an investor's real earnings by more than 30% compared to the announced returns.

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For example, an investor who purchased a 25 m² studio discovered, after 2 years of high occupancy, unexpected renovation and elevator costs, reducing the net return from 4.8% to 3.2%.

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It is essential to include in your budget:

• margin for work and renovation (e.g.: DPE upgrades, upgrading to standards)
• realistic condominium fees
• management fees excluding rent (services, furniture, replacement)

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Lack of prospect of resale

Unlike traditional residential real estate, the resale of a property in a student residence depends heavily on: the good condition of the commercial lease, the solidity of the manager, and the attractiveness of the location. Some articles point out that the added value in this segment can be very limited, especially if the location is not very dynamic.

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Concrete case: an investor wanted to sell a property in a student residence after 6 years, but the remaining lease was weak and the location became less popular; he had to accept an 11% discount on the initial purchase price.

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To anticipate this step, check:

• the liquidity of the secondary market for this type of asset,
• the remaining term of the commercial lease,
• the future attractiveness of the area (studies, transport, services)

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Conclusion

Investing in a student residence is a serious option in the 2025 real estate landscape: attractive return, sustained demand, simplified management. However, this type of investment requires a thorough analysis of the location, services, lease and manager. By integrating the right criteria and avoiding the pitfalls identified, you can build a profitable and sustainable asset.

Do you want to go further? Our team at MeCaza is at your disposal to assist you in the selection, tax arrangements and management of your student residence investment project. Contact us now for a free and non-binding audit.