Going to an American college seems like fun and games in the movies, but the real world is a little bit different. 

The American dream of a college education costs money, and a lot of it. Tuition fees average over USD $38,000 per year for private colleges, and between USD$10,700 and $27,500 for public colleges…

If your bank card shrivelled up after reading that, join me in giving praise to the Australian government, their higher education subsidies and their gracious HECs program. 

Praise be. 

Those wild figures don’t include the cost of living, with the largest of those being housing. 

Responding to this demand is the US Student Housing REIT (ASX: REIT), an ASX listed real estate investment trust, leveraging the obscene cost of studying in the US for Australian investors. Clever, with a dash of evil. 

The Trust invests in off-campus housing for students attending four major public universities across the US. They aim to provide high quality, purpose-built accommodation in close proximity to the universities. 

With the academic year commencing in August, the Trust is currently seeing a busy period with in-country housing asset managers, Student Quarters reporting a flurry of activity preparing for new student arrivals. 

Despite initial set up costs, the Trust has issued a distribution of USD 1.20 cents per share, which will be payable by the end of August. This is the smallest quarterly distribution, but with continued growth and increased rental rates, this distribution is expected to grow. 

To maximise profits for their shareholders, the Trust has increased rent amounts by 8%, compared to a 4.3% increase last year. This reflects inflationary increases and will ensure the REIT stays profitable.  

7 of the 9 asset properties owned by the REIT are already fully pre-leased with move-ins scheduled for mid to late August. The entire portfolio is 96.7% leased. 

Whilst an interesting investment proposition, the whole idea of profiteering from people who just want an education, the key to a better life, is kind of repulsive to me. But, supply and demand is a founding theory of economics, and the fact that US college goers have limited options if they find themselves not born with a silver spoon is a sign that the US college system is broken. Can you really blame clever investors or real estate trusts?