For real estate investors in Wilmington, the University of North Carolina Wilmington (UNCW) isn't just a school; it is a massive economic engine. With enrollment projected to hit nearly 20,000 students in Fall 2025, the demand for off-campus housing has never been higher.

But renting to students is a different beast than renting to families. It offers higher yields, but it comes with higher risks—specifically regarding zoning laws and turnover.

If you are thinking about buying a 4-bedroom house in College Acres or a townhouse on Randall Parkway to rent to students, here is the unvarnished reality of the market right now.

The Bull Case: Why Invest Now?

The numbers for 2025 create a compelling argument for student housing.

1. The "Guaranteed" Tenant Pool

UNCW is growing faster than it can build dorms.

The Shortage: For the last three years, UNCW has had to lease off-campus apartment complexes (like Plato's Lofts) just to house its freshmen. Sophomores are also now required to live on campus, pushing upperclassmen out of the dorms and into the private market.

The Result: Vacancy rates for student-targeted housing within a 1-mile radius of campus are near 0%.

2. Superior Cash Flow (Per-Bed Pricing)

Student housing allows you to rent by the room, not the house.

The Math: A 3-bedroom home rented to a single family might command $2,400/month. That same home rented to three students at $900/bed generates $2,700/month.

2025 Rates: Current market data shows per-bed rates for updated units near campus ranging from $850 to $1,000+, drastically outperforming long-term residential averages.

3. Parental Guarantees

Worried about rent collection? Don't be. Most student leases require a Parental Guarantor. You aren't relying on a 20-year-old's part-time job; you are relying on their parents' credit score. It is often the most secure rent you will ever collect.

The Bear Case: The "Three Unrelated" Rule

This is the single biggest risk for new investors in Wilmington, and it is often ignored until a violation notice arrives.

1. The Zoning Trap

The City of Wilmington has a strict zoning ordinance regarding "Family" occupancy in single-family districts.

The Rule: You generally cannot rent a single-family home to more than three (3) unrelated persons.

The Danger: Investors often buy a 4-bedroom house thinking they can rent it to 4 students. This is illegal in most residential zones. If you do this, you are one angry neighbor complaint away from a code violation and an eviction order.

The Fix: Stick to 3-bedroom homes or buy in multi-family zoned districts where this cap doesn't apply. Always verify the specific zoning district before calculating your ROI based on 4 tenants.

2. The "Turnover" Grind

Student leases typically run August to July.

The "Turn" Week: You have roughly 5–7 days in early August to paint, clean carpets, and repair drywall between tenants. It is a frantic, expensive week.

Wear and Tear: Students are hard on houses. Budget 1.5x your normal maintenance reserve. You will be replacing blinds, touching up paint, and unclogging toilets more often than with a professional couple.

3. The "Summer Gap"

While most leases are 12 months, some students try to negotiate 9-month leases.

The Strategy: Never accept a 9-month lease. You will never find a tenant for June and July. Standardize your lease to end July 25th, giving you time to prep for the August 1st intake.

Top Neighborhoods to Watch

College Acres / Hillsdale: The "Gold Coast" of student rentals. Walkable to campus, large lots, but highly scrutinized by code enforcement due to density.

Murrayville / Kings Grant: Slightly further out (requires a car or shuttle), but more affordable purchase prices offer better cap rates.

Townhomes on Racine/Randall: These are purpose-built for students. Lower appreciation potential, but turnkey cash flow with less maintenance.

The Bottom Line

Student housing is a high-octane investment. It requires active management and strict adherence to fair housing and zoning laws. But if you buy a 3-bedroom home in the right zone and lease it by the bed, it can outperform almost any other asset class in our region.

At Aspyre Realty Group, we know the zoning map. We can tell you instantly if that "perfect 4-bedroom rental" is a cash cow or a code violation waiting to happen.