Chico, CA, has emerged as a standout location for student housing investment across California. With California State University, Chico (CSU Chico) anchoring the community, the Chico real estate market is experiencing heightened demand for well-located, high-quality student housing. For investors looking to diversify into this resilient asset class, Chico offers the combination of consistent demand, limited new development, and favorable leasing patterns.
Why Student Housing Investment Is Growing in Chico
Chico is home to over 13,000 students at CSU Chico, many of whom prefer off-campus living due to the limited availability of university-provided housing. According to CSU Chico data, only a small percentage of students are housed in on-campus facilities, leaving the private market to absorb the remaining demand. This imbalance creates a strong and consistent rental market, especially near campus and downtown.
Despite this demand, there are currently no new student housing projects under construction in Chico, further increasing competition for existing inventory. While overall enrollment at CSU Chico has not yet returned to pre-COVID levels, falling from a high of over 16,000 students to around 13,840, the university has seen modest year-over-year growth since pandemic-era lows. This suggests gradual stabilization and renewed interest in campus life, helping sustain off-campus housing demand.
Capital Rivers Commercial is currently representing two properties that exemplify strong student housing opportunities:
- 544 W 3rd Street, Chico, CA: Located just blocks from CSU Chico, this multi-tenant property offers proximity and appeal.
- 536 W 3rd Street, Chico, CA: Another high-performing asset within walking distance to campus and downtown.
Student Housing Investment: Chico’s Market Characteristics
Understanding the local market is essential to making smart investments in student housing. Chico’s unique characteristics make it particularly attractive:
- Pre-leasing Behavior: Students often secure housing up to 12 months in advance. Competitive locations are typically fully leased before summer.
- Co-signed Leases: Most students require co-signers, usually parents or guardians, who legally back the lease and provide financial stability.
- Per-bed Leasing Models: Properties often lease by individual beds rather than by the unit or room. In many cases, there may be more than one bed per bedroom, which can further increase rental revenue.
- Multi-tenant Living: Most units are designed or adapted for shared living which is ideal for student groups.
- Limited Car Use: Many students rely on bikes and public transit. Key features include bike parking, proximity to campus, and safe pedestrian routes.
Amenities that appeal to students include furnished units, in-unit laundry, internet and utilities included, and flexible lease options. Properties that offer these features typically see higher demand and reduced vacancy.
How Much Do Student Rentals Earn in Chico?
Chico’s student housing market provides investors with solid returns. Rents vary depending on location, amenities, and room count, but per-bed pricing can yield higher returns than traditional per-unit leases. For example, a 4-bedroom house renting at $650 per bed can gross $2,600 monthly with single-bed occupancy. However, if each bedroom contains two beds, the same property could gross $5,200 monthly. This “by-the-bed” model, especially in shared rooms, offers significant income potential, particularly when amenities and location align with student preferences.
Maintenance costs may be higher, but strong leasing demand and low vacancy offset many of these expenses. Occupancy rates in Chico student housing are consistently high, with most properties near campus operating at or near full capacity. Additionally, many landlords report near-full leasing before the academic year begins.
Step-by-Step: How to Lease Student Housing in Chico
If you’re new to the student housing sector, follow these steps to successfully lease in Chico:
- Identify Your Target Audience: Primarily students, but consider faculty, staff, and short-term professionals.
- Invest in Location: Choose properties close to CSU Chico, public transport, and downtown.
- List Early and Often: Start marketing units in January to capture early interest.
- Advertise Strategically: Use CSU Chico housing boards, social media groups, and local platforms.
- Write Smart Leases: Include clauses for co-signers, subleasing options, and noise control.
Risks and Considerations for Investors
Student housing does come with unique risks. High turnover means more wear and tear, and student behavior can sometimes lead to property damage. However, these risks are balanced by stable demand and strong rental income. Key strategies to mitigate issues include:
- Hiring Experienced Property Managers: Preferably those familiar with student leasing.
- Using Per-bed Leases: Easier to manage and more profitable.
- Offering Maintenance Packages: Keeps properties in top condition.
- Enforcing Lease Terms: Hold students and co-signers accountable.
It’s also important to consider long-term versatility. If market trends change, many student-focused properties can be converted into traditional multifamily rentals due to their size and location.
Chico’s Appeal for Long-Term Investment
Beyond rental income, student housing in Chico offers long-term property appreciation. The city benefits from a growing population, stable university presence, and limited land for new development near campus. Investors can also benefit from the city’s commitment to supporting CSU Chico, which strengthens community infrastructure and economic growth.
Even niche groups like Greek life often sign multi-year leases for houses, further stabilizing income. Additionally, with many students pursuing graduate education or returning as professionals, Chico maintains a large base of potential renters.
Partner with a Trusted Chico Real Estate Company
Capital Rivers Commercial specializes in helping investors navigate the Chico student housing market. Our listings offer proven potential and excellent locations. Whether you’re looking to expand your portfolio or make your first investment, we can help you find the right property.
Explore our available listings in Chico or contact us for a tailored consultation.
