Few real estate rental markets can present the sort of constant need for rental homes found in a college town. It is worth noting that there is a lot to know before choosing 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. Nevertheless, with steady 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 one thing in common: the students, faculty, and staff who reside there all need housing close to campus. Such steady demand can quickly turn to buy an investment property in a college town that seems like an attractive option. Even though this is what usually happens, there is some crucial information that must be digested before starting your property search.
To illustrate an example, it is always a great idea to research the campus and surrounding community prior to choosing one town over another. Accumulating 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 critical to have before investing in any university community.
One other vital 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 contrasted 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 deciding whether to buy 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 neighborhood in the area are among the most important 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 usually change from place to place.
If the result of your research is promising enough to make you want to go ahead with a real estate purchase in your chosen location, you can significantly narrow your search parameters if you decide early on 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 are planning 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 understand how to market your rental effectively in order to draw them to your property.
Regardless of who your target renter is, it is crucial to be genuine about your capability to deliver consistent and high-quality property oversight and maintenance. Property management can be a very hands-on job, one that would demand 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 quickly or regularly, often fairly close to your own hometown.
The other way of doing it yourself is to get the services of a quality property management company to manage your property for you. There are real 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 choose a national company like Real Property Management Hampton Roads, 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.
Here at Real Property Management Hampton Roads, we help property investors such as yourself make 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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