Few real estate rental markets can deliver the type of solid demand for rental homes like in a college town. Still, there are several things to gather before aiming to invest in rental property in these areas. No two college towns are exactly alike, and different types of institutions will sway an owner’s ability to competitively lease off-campus housing. Although with unfailing demand and the nature 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.
Throughout the United States, every college city has one thing in common: the students, faculty, and staff who settle there all necessitate housing close to campus. Such an solid demand can make buying an investment property in a college town seem like an attractive option. Though this is commonly the reason, there are some imperative things to know before beginning your property search.
For instance, it may be clever to research the campus and surrounding community before embracing one local over another. Putting together information about 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 to estimate the current and future potential of any potential area. If a school has shrinking enrollments or is opening a second campus in another community, both could begin a sharp decrease in demand for off-campus housing. Details like this are serious enough before investing in any university community.
Another factor to consider 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, meanwhile, may have less on-campus housing when matched to the number of students attending but may have a high percentage of local, part-time, or commuting students who do not need or care to have a house close to campus. These are all circumstances you need to know in order to best identify beforehand whether to purchase a rental property in a college town.
It is also crucial 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 adjacent vicinity are among the most essential components. Crime rates, amenities, age of the house, and most recent updates will all influence your potential to attract tenants and charge a competitive rental rate. Another pivotal factor 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 inspect 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 range mostly from place to place.
If your exploration is encouraging and you resolve to proceed with a property acquisition in your chosen position, you can significantly narrow your search parameters if you decide first on how much you need to spend, how much risk you can comfortably assume, and how much time you own to devote to property management. Managing a rental property is a heavy time obligation, particularly if you are preparing to execute it all by yourself. Rental homes in college towns are somewhat unique in that they lean towards having a high rate of turnover. Assuming that students are your target demographic, it’s essential to recognize that there will be several tasks required in marketing, screening, and leasing your property from year to year, perhaps even semester to semester. Otherwise, if you expect to rent to graduate students or faculty, you will have to understand how to market your rental effectively to entice them to your property.
Regardless of who your target renter is, it is critical to be aware about your capability to implement consistent and high-quality property oversight and maintenance. Property management can be a decidedly hands-on job, one that requires utmost availability should an emergency appear. If you want to manage your assets yourself, you are also restricted to places that you can gain access to immediately or frequently, places that are fairly near to your hometown.
The other option instead of achieving it yourself is to enlist a certified property management company to supervise your property for you. There are actual benefits in 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 opt for a national company like Real Property Management First Choice, you are not limited to buying in your home market. Your investment options are infinite with the guide of a network of reliable property management franchise offices coast to coast.
At Real Property Management First Choice we can help property investors like you decide if procuring one or more rental assets in a college town makes financial sense. We have market data and industry experts who can provide you with the information 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.