Few real estate rental markets can offer the solid demand for rental houses like in a college town. Conversely, there are some things to consider before planning 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. But with hard work and a drive 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, every college city has one aspect in common: the students, faculty, and staff who live there all want housing close to campus. Such a common request can make buying an investment property in a college town seem like an attractive option. Though this is predominantly the case, there are some paramount concerns to consider before beginning your property search.
For example, it may be a wise decision to research the campus and surrounding community before embracing one locality over another. Putting together evidence on enrollment history, the projected growth of the school, the current and projected ratio of students to on-campus housing, and any planned developments can aid you in estimating the current and future potential of any agreed 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. Details like this are critical to be aware of before investing in any university community.
Another indispensable element 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, nonetheless, might have less on-campus housing when rivaled 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 rent a house close to campus. These are all the concerns you should do your best to ascertain before establishing whether to own a rental property in a college town.
It is also necessary 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 nearby locality are among the most imperative concerns. Crime rates, amenities, age of the house, and most recent updates will all influence your means to attract tenants and charge a competitive rental rate. Another invaluable attribute 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 investigate 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 assort largely from place to place.
If your research is promising and you have given the go signal to move on with a real estate acquisition in your chosen city, 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. Holding a rental property requires a significant amount of time, especially if you are plotting to accomplish 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 vital to realize that there will be a lot more work engaged in marketing, screening, and leasing your property from year to year, perhaps even semester to semester. Whereas, if you desire to rent to graduate students or faculty, you will need to figure out how to market your rental effectively to charm them to your property instead.
Regardless of who your target renter is, it is imperative to be truthful about your ability to give consistent and high-quality property oversight and maintenance. Property management can be a very hands-on work, one that needs full-time readiness should an emergency happen. If you want to manage a property yourself, you are also tied down to areas that you can enter immediately or effortlessly, generally places adjacent to your hometown.
The other option available to you is to assign a desirable property management company to oversee your property for you. There are a lot of 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 hire a national company like Real Property Management Azalea City, you are not limited to buying in your home market. Your investment options are numerous with the guide of a network of reliable property management franchise offices coast to coast.
At Tillmans Corner, we can assist property investors like you figure out if buying one or more rental properties in a college town makes sense. We have market data and industry experts who can give you the data you need to make the best possible decision. Contact us today for more information.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.