Few real estate rental markets can extend the brand of constant interest in rental homes seen in a college town. Nevertheless, there is a great deal of information that one must know before deciding 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. Notwithstanding, with constant demand 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.
All over the United States, every college city has that common denominator among them: the students, faculty, and staff who are residing there all desire a housing close to campus. Such strong demand can make buying an investment property in a college town seem like an attractive option. Even though this is regularly the situation, there are some significant considerations before starting your property search.
For instance, it may be smart to research the campus and surrounding community before deciding on one town over the other. Collecting 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 significant to have before investing in any university community.
One more critical 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, alternatively, may have less on-campus housing when contrasted to the number of students attending but may have a high percentage of local, part-time, or commuting students who do not wish or want to house close to campus. These are all important facts you should do your best to catch on before deciding whether to purchase 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 some of the essential aspects. Crime rates, amenities, age of the house, and most recent updates will all directly influence your ability to attract tenants and charge a competitive rental rate. One more 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 would any required homeowners’ association fees. You must also monitor 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 change vastly from place to place.
If what your findings indicate is that the numbers are indeed promising, and you decide to go ahead with a real estate purchase in your chosen location, you can significantly narrow your search parameters if you make the decision early regarding the amount 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, particularly if you intend to be a DIY property owner. 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 recognize that there will be a lot more work entailed in marketing, screening, and leasing your property from year to year, perhaps even semester to semester. Then again, if you intend to rent to graduate students or faculty, you will need to understand how to market your rental effectively in order to draw them to your property.
Regardless of who your target renter is, it is important to be faithful about your capability to provide consistent and high-quality property oversight and maintenance. Property management can be a very demanding occupation, one that requires a full-time presence should an emergency arise. If you want to manage a property yourself, you are also restricted 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 deciding 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 Three Rivers, 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 Three Rivers, we can help property investors like you choose if getting 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 feasible decision. Contact us today for more information.
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