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Real Estate Speculation in College Towns

Aerial View of College Campus and Surrounding AreaFew real estate rental markets can allow the sort of constant need for rental homes seen in a college town. However, there is a lot to distinguish before selecting to invest in rental property in these areas. No two college towns are exactly alike, and different types of institutions will influence an owner’s ability to competitively lease off-campus housing. However, with constant interest and an inclination 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.

Across the United States, each college city has one thing in common: the students, faculty, and staff who reside there all want housing close to campus. Such constant demand can make buying an investment property in a college town seem like an attractive option. While this is usually the situation, there are some significant concerns before beginning your property search.

Case in point, it may be smart to research the campus and surrounding community before deciding on one town over another. Collecting data on enrollment history, the projected growth of the school, a 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 presented area. If a school has shrinking enrollments or is opening a second campus in another community, both could produce a sharp decrease in demand for off-campus housing. Data like this is crucial to hold before investing in any university community.

Another essential point 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, conversely, 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 just as essential 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 encompassing neighborhood are amongst the several important viewpoints. 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 extensively from place to place.

In case your research is promising, and you choose to go forward with a real estate investment in your preferred 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. Having a rental property is a serious time responsibility, particularly if you are thinking of doing it most on your own. Rental homes in college towns are somewhat unique in that they manage 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. Then again, if you plan to rent to graduate students or faculty, you will need to learn how to market your rental effectively in order to draw them to your property.

Regardless of who your target renter is, it is necessary to be pragmatic about your capability to produce consistent and high-quality property oversight and maintenance. Property management can be a very hands-on job, one that wants full-time availability should an emergency occur. If you’re going 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 option of doing it yourself is to choose a quality property management company to handle your property for you. There are substantial advantages to doing so, particularly 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 opt for a national company like Real Property Management Silverstone, you are not limited to buying in your home market. Your investment options are wide open with the assistance of a network of reliable property management franchise offices coast to coast.

At Real Property Management Silverstone, we can help property investors like you decide if purchasing 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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