Few real estate rental markets can grant the sort of permanent need for rental homes found in a college town. It is worth remarking that there is a lot to know before wanting 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. With regular 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 across the United States, all college city has one thing in common: the students, faculty, and staff who reside there all need housing close to campus. Such regular demand can immediately turn to buy an investment property in a college town that seems like an attractive option. Even though this is what usually follows, there is some necessary information that must be understood before starting your property search.
To show an example, it is always an excellent approach to research the campus and surrounding community prior to choosing one town over another. Collecting data 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 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. Data like this is significant to own before investing in any university community.
One extra necessary factor to take 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 opposed 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 must do your best to discover before determining whether to buy a rental property in a college town.
It is just as imperative 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 community in the area are among the most critical 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 generally vary from place to place.
If the outcome of your analysis is promising enough to make you want to go forward with a real estate purchase in your chosen location, you can significantly narrow your search parameters if you decide early on the cost 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 commitment, especially if you are preparing 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 expect that there will be a lot more work required 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 learn how to market your rental effectively in order to entice them to your property.
Regardless of who your target renter is, you must be honest about your aptitude to fulfill consistent and high-quality property oversight and maintenance. Property management can be a very hands-on job, one that would require your full-time availability should an emergency arise. If you want to manage a property on your own, you are also restricted to areas that you can access immediately or frequently, often fairly close to your own hometown.
The other way of doing it yourself is to retain the services of a quality property management company to manage your property for you. There are substantial benefits 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 choose a national company like Real Property Management Meridian, you are not limited to buying in your home market. Your investment options are wide open with the cooperation of a network of reliable property management franchise offices coast to coast.
Here at Real Property Management Meridian, we assist property investors such as yourself in making the decision should you decide to buy one or more rental properties in a college tow. 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 details.
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