Few real estate rental markets can present the type of unwavering demand for rental homes found in a college town. However, bear in mind that there is a lot to know prior to making the decision whether or not you want to invest in rental property in these areas. No two college towns are exactly alike, and different types of institutions will affect an owner’s ability to competitively lease off-campus housing. However, with unwavering demand and a tendency to appreciate well, investing in one or more rental homes close to a college or university can be an effective way to achieve your long-term financial goals.
All throughout the United States, every college city has one mutual thing that they all share: the students, faculty, and staff who live there all desire a housing close to campus. Such consistent demand can make buying an investment property in a college town seem like an attractive option. While this is often the case, there are some important considerations before starting your property search.
For example, it may be wise to research the campus and surrounding community before choosing one town over another. Gathering information on enrollment history, the projected growth of the school, current and projected ratio of students to on-campus housing, and any planned developments can help you estimate the current and future potential of any given area. If a school has shrinking enrollments or is opening a second campus in another community, both could cause a sharp decrease in demand for off-campus housing. Information like this is critical to have before investing in any university community.
Another important consideration is the type of institution that is at the core of the town or city. Private universities and colleges may have strict housing policies and more on-campus housing available, thereby reducing the need for off-campus options. Public universities, on the other hand, might have less on-campus housing when compared to the number of students attending, but may have a high percentage of local, part-time, or commuting students who do not need or want to house close to campus. These are all things you should do your best to find out before deciding whether to buy a rental property in a college town.
It is equally important to evaluate the area’s available investment properties to ensure that any potential options have features commonly found in profitable rentals. The condition of the house and the surrounding neighborhood are among the most important aspects. Crime rates, amenities, age of the house, and most recent updates will all affect your ability to attract tenants and charge a competitive rental rate. Another important aspect is understanding the tax implications of your purchase. The amount of property tax, both current and future, must be included in the cost of owning the property, as must any required homeowners’ association fees. You should also check for any restrictive codes or laws that might prohibit you from renting out the property; each city and town has its own set of regulations that can vary widely from place to place.
If your research is encouraging and you decide to go ahead with a real estate purchase in your chosen location, you can significantly narrow your search parameters if you decide early on how much you want to spend, how much risk you can comfortably assume, and how much time you have to devote to property management. Owning a rental property is a serious time commitment, especially if you are planning to do most of it yourself. Rental homes in college towns are somewhat unique in that they tend to have a high rate of turnover. If students are your target demographic, it’s important to understand that there will be a lot more work involved in marketing, screening, and leasing your property from year to year, perhaps even semester to semester. On the other hand, if you plan to rent to graduate students or faculty, you will need to understand how to market your rental effectively in order to attract them to your property.
Regardless of who your target renter is, it is important to be realistic about your ability to provide consistent and high-quality property oversight and maintenance. Property management can be a very hands-on occupation, one that requires full-time availability should an emergency arise. If you want to manage a property yourself, you are also limited to areas that you can access quickly or regularly, often relatively close to your own hometown.
The alternative to doing it yourself is to hire a quality property management company to manage your property for you. There are real benefits to doing so, especially if you are planning to rent to students. Placing ads, interviewing renters, showing your property, performing routine maintenance, handling move-in, and move-out efficiently – all of these can be turned over to a team of professionals dedicated to protecting the value of your investment property. What is more, if you choose a national company like Real Property Management Vision, you are not limited to buying in your home market. Your investment options are wide open with the help of a network of reliable property management franchise offices coast to coast.
At Real Property Management Vision, we can help property investors like you decide if buying one or more rental properties in a college town makes sense. We have market data and industry experts who can provide the information you need to make the best possible decision. Contact us today for more information.
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