Weekly Housing Trends

The big story

The Sanctuary at Thousand Oaks/MBK Rental Living

Would you go back to high school—for good? Haunting the halls of your adolescence is now a legit housing option, as vacant schools across the country are being converted into residential apartments.

Quick vocab lesson: “Adaptive reuse”—the practice of giving underused buildings a second life as something we actually need, like apartments—has hit a record high, with 180,585 units currently in the works, per RentCafe. Hotels make up 37% of all makeovers, followed by offices (24%), factories (20%), and schools (8%).

Schools may be the smallest category on the adaptive-reuse honor roll, but they’re also the fastest-growing for good reason: Public school enrollment has been declining as more families choose private or charter, leaving these gorgeous, historic buildings out of a job. This is how the 1924 Timber School in Conejo Valley, CA (last filled with students in 2017) became “boarded up and vacant for years,” says Dave Kurian at MBK Rental Living. After acquiring the property in 2023, MBK turned the site into The Sanctuary at Thousand Oaks, a 218-apartment complex with some classrooms as co-working spaces and the old cafeteria revamped as a grab-and-go cafe.

Schools are shoo-ins for residential conversions because they exist in just about every town in America. Beyond that geographical edge, they come architecturally blessed with light-filled rooms, ample parking, and a football field’s worth of outdoor space. By contrast, office buildings fail every test as conversion candidates: They’re crammed in downtown cores, and their sprawling, windowless floor plans cry out for full overhauls just to be livable. It’s no surprise that a wave of recent office-to-residence projects hit structural problems and got shut down entirely. Still, America’s dire need for more housing means that adaptive reuse isn’t dropping out anytime soon; plus tax breaks are enticing developers to carve out apartments everywhere from power plants to prisons.

But these incentives come with strings attached—like preserving many of the original building’s historic touches. The Sanctuary at Thousand Oaks took great pains to salvage and restore the school’s Spanish roof tiles, stucco, and cupola. The Residences at Wells School in Southbridge, MA (a junior high converted into 62 apartments in 2022) even kept a few chalkboards and lockers.

So what’s it like living in a school? One Wells School resident—who attended junior high there—admitted to some not-so-fond memories of getting smacked in the face during dodgeball in gym class. Now, she hosts community potlucks in the building.

Take-home lesson: Just about any old building can earn some extra credit as a home, which is why we’re giving the adaptive reuse trend an A+.

      

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What's up this week

Realty check

Source: WalletHub; Designer: Andre Blockett.

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You asked, we answered

Q: Why are mid-term rentals on the rise?

PIKSEL/Getty Images

Mid-term rentals—which typically last a month or longer—offer a happy medium between short- and long-term stays. They’re also the rental market’s fastest-growing segment, accounting for 19% of demand (up 8% year over year, more than double the short-term rental growth rate). They’re particularly popular with nurses, corporate contractors, and other traveling professionals on temporary assignments at hospitals, data centers, college towns, and other workplaces. The good news for mid-term landlords? Since these tenants are working rather than on vacation, they’re less likely to trash the place, drive up housekeeping costs, or drum up noise complaints from neighbors.

“Monthly rentals are the sweet spot: less day-to-day work than short-term, but better cash flow than long-term,” explains Jeff Hurst, CEO of Furnished Finder, who notes that mid-term renters tend to stay an average of 102 days. “They also help fill low-season gaps, reduce vacancy risk, and cut turnover and cleaning costs by up to 70%, often delivering comparable or even higher net returns with less effort.” Mid-term rentals are enjoying a regulatory tailwind, too: Cities cracking down on short-term rentals are often okay with stays over 30 days.

If you can’t decide between running a short- or long-term rental, the beauty is you don’t need to. As Hurst explains, “Many property owners are adopting hybrid strategies, toggling between short-term and monthly rentals to optimize revenue and reduce volatility.” So feel free to mix and match to maximize your occupancy and ROI. You’ll also want to research your market to see whether it’s ripe for mid-term rentals and factor in corporate project cycles, university calendars, and other seasonal considerations. Here’s more on mid-term rentals.

Got a question about real estate? Ask it here, and we’ll answer it in a future issue.

Real talk

Gary Brandeis/Scholar Hotels/Scholar Hospitality Holdings

College grads always come back: Long after tossing the cap and gown, they return for reunions, football games, and a nostalgic beer or two. Gary Brandeis—a self-professed “crazy, Kool-Aid-drinking rah-rah Penn State” alum—has found a way to turn those repeat visits into a solid real estate investment strategy as the owner of Scholar Hotels.

Q: What makes hotels in college towns a smart investment? “The biggest advantage is reliable demand. Families visit students, reunions bring alums, and prospective students tour campus. University markets are not just places where students spend four years; they’re places people return to for decades. I met my best friends to this day at Penn State, and almost 40 years after I graduated, they are still my best friends. So I’m back there all the time. And since college events are planned well in advance, we also know when we’ll be busy and can adjust our rates accordingly. That consistency is unique in the hospitality world.”

Q: How many hotels do you own, and do you plan to expand? “We have six hotels in State College, PA, around Penn State. We also have four other hotels elsewhere and two more under development. If we’re successful, I’d like to expand to other college towns, focusing on large universities in more remote areas where thousands of students eat, drink, and study together because there’s nowhere else to go. That’s what makes the emotional connection so strong, and what we’re turning into an investment.”

Q: What’s the investment you’re offering? “Scholar Hospitality Holdings is an SEC-qualified investment for non-accredited investors; there’s a $5,000 minimum with anticipated annual dividends of 4% to 6% returns. We’re trying to connect two parts of the brain: the financial part that says this may be a good investment and the emotional connection people have to their alma mater. We’re trying to raise $75 million by the end of the year. The investment also comes with VIP benefits—early check-in, suite upgrades, bar discounts—so it’s a cross between a hotel rewards program and a real estate investment.”

Q: Any advice for others on investing in college towns? “College towns are similar to beach resorts in that guests are willing to pay more to be near campus—think ‘campus-front’ rather than ‘beachfront.’ These markets also require a deep understanding of demand patterns. Major weekends can create incredible activity, but owners need to understand how to build a sustainable business year-round. Don’t just evaluate the property; evaluate the specific ecosystem around it. The strongest opportunities are tied to communities where people already have a long-term connection.”

      

Housing market of the week

Tyler Clark/Inspire By Tyler

Tyler Clark bought her first home in Chicago at 24. By 33, this 3D hair artist had built an eight-property portfolio. Here’s how it all began with just 1% down.

How she got started: Clark didn’t set out to become a real estate investor; she just figured her money was better spent on owning than renting. That mindset led to buying her first home in 2016 (for $230,000) and her first rental property two years later (for just $30,000). Now, she says, real estate has become “a way to build additional income streams” alongside her work as an artist and founder of Inspire By Tyler.

Her market’s pros: Chicago has that magic combo of low-priced homes and high demand for rentals. It also didn’t hurt that Clark snagged her first home through a first-time homebuyer program at Rocket Mortgage, which let her put down just 1% out of pocket. For future properties, she got creative. “I used a combination of conventional loans, personal savings, a loan from my IRA, and a home equity loan on my primary residence,” she says.

The cons: Illinois’ tenant-friendly laws have cut both ways for Clark. Most of her tenants have been great, but she’s also dealt with months of unpaid rent and drawn-out evictions. “It taught me the importance of screening and balancing empathy with good business decisions,” she says. Another curveball? A snake infestation. The tenants bailed (not that she could blame them).

Her advice: Don’t wait for perfect conditions. “Your first property doesn’t need to be your dream property,” Clark points out. “It just needs to be a step in the right direction.” Start small, learn the ropes, and have a strategy and vision before you scale. She also stresses building cash reserves for the surprises that inevitably come with owning property, from critters to tenants who don’t pay up.

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