It's not unusual for some, not all, landlords to prohibit students (at least undergrads) from renting their apartments because of hard partying and poor rent payment habits.
To my knowledge most of this investment is outside of the NYC metropolitan area. New investment in NYC has cap rates from 1% to, rarely, 6%, elsewhere 6%+ or more can be obtained by careful investors.
Licensed Real Estate Salesperson
New York, NY
Part of this is to do with the rental market seeing year on year increase by as much as 20% in some neighborhoods and also to do with the now very much stabilized sales market. Biggest problem right now, is limited inventory and not having enough quality inventory to show.
Having said that, there are some great apartments to still be had, especially with many new constructions and developments popping up all over the city!