Few real estate rental markets can grant the kind of consistent demand for rental homes that is present in a college town. Nevertheless, every college town is exceptional, and different types of institutions will affect an owner’s ability to lease off-campus housing competitively.
Around the United States, every college city has one thing in common: the students, faculty, and staff who live there all need housing close to campus. Such steady demand can make buying an investment property in a college town tempting. Even though this is commonly the case, there are several essential considerations before starting your property search.
Learn about the local university or college
For example, it may be prudent to research the campus and surrounding community prior to selecting one city over another. Getting data on enrollment history, the school’s projected growth, the current and projected ratio of students to on-campus housing, and any planned developments can assist in identifying the current and future potential of a specific area.
Another critical 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, minimizing the necessity for off-campus options. On the flip side, public universities may have a lower on-campus housing in comparison to the number of students attending but may have a significant number of local, part-time, or commuting students who do not prefer or need living in a house close to campus.
Understand the college town’s real estate market
It is also essential to review 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 surrounding neighborhood are among the most critical aspects.
Crime rates, amenities, the house’s age, and most recent updates will all affect your ability to attract tenants and charge a competitive rental rate. Another critical aspect is understanding the tax implications of your purchase.
The current and future property tax amount has to comprise in the property’s cost, as must any required homeowners’ association fees. It is also advisable to verify whether there are any restrictive codes or laws that might prohibit you from renting out the property; every city and town has its own set of regulations that can vary significantly from place to place.
Create an investment and management plan
If your exploration is positive and you choose to continue with a real estate purchase in a college town, you can greatly reduce your search parameters by figuring out early on how much you want to spend, the level of risk you can comfortably assume, and the amount of time you have to dedicate to property management.
Owning a rental property is an enormous time investment, particularly if you intend to perform the majority of the tasks yourself. Rental homes in college towns are distinctive in that they have a high turnover rate. If students are your target demographic, it’s imperative to recognize that the marketing, screening, and leasing of your property will necessitate a significant amount of effort from year to year and possibly from semester to semester.
Hire a professional property manager
Hiring a quality property management company to manage your property is an alternative to performing the task independently. This has substantial advantages, mostly if you intend to rent to students. A team dedicated to protecting your investment property’s value is responsible for placing ads, interviewing renters, showing your property, conducting routine maintenance, and handling tenant turnover.
At Real Property Management First Choice, we assist Fort Smith property investors such as yourself when deciding whether it is advisable to look into one or more rental properties in a particular area. We have skilled professionals and market data at our disposal to ensure that you have the necessary information to make the most informed decision. For further information, Contact us today or call 479-242-0791.
Originally Published on October 4, 2019
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