Pros And Cons Of Investment Property In College Towns
REASONS TO CONSIDER BUYING INVESTMENT PROPERTY NEAR A UNIVERSITY
Many real estate investors shy away from college towns as they think these properties are just ephemeral party houses for young adults. While a lot of partying does go on in college towns, there are many good reasons to buy property near a University. Below are the pros and cons of investing in property in college towns.
THE PROS OF BUYING INVESTMENT PROPERTIES IN COLLEGE TOWNS
COLLEGE TOWNS MARKET THEMSELVES
Complete with entertainment, restaurants, and high walkability factors, college towns sell themselves. It’s very easy to market your rental in an area so full of the amenities people want.
IT’S EASY TO FIND RENTERS
College towns are full of people who come from somewhere else. For the duration of their education at the university, these people need a place to live.
Also, there’s the college staff and faculty, too. While these people are usually tied to the area more permanently than students, they still often prefer to rent rather than buy.
GREAT RENTAL RATES
Because there’s such a high demand for rentals in the area, you’ll be able to charge higher rental rates.
VACANCY RATES ARE LOWER
It’s common for vacancy rates to increase during the summer months when school is on break, but you can protect yourself during this time by requiring tenants to sign a one-year lease.
Cons of Buying Investment Properties Near a University
PROPERTY DAMAGE
College students cause a lot of wear and tear no matter where they live, so you should factor this cost into the security deposit you charge. Also, time is money, so factor in the time it takes you to prepare the unit for the next tenants, too.
HIGHER TURNOVER
College students move around a lot, which means you may spend more time finding new renters than you would in another part of town away from the university. That said, as stated in Pro #2 above, there’s always someone waiting to rent your unit.
FINDING NEW RENTERS IN THE SUMMER MAY BE DIFFICULT
Although it’s easy to find renters during the school year, it may be difficult finding new renters during the summer when everyone is on break. Again, by requiring tenants to sign a one-year lease, you won’t have to worry about finding new renters once school lets out.
COLLEGE STUDENTS CAN BE DEMANDING
Because many of the people you rent to are students, they may be renting an apartment for the first time. They may have many questions and demands you’ll need to address often. It’s a good idea to live close to your college town rental, or hire a dependable property management company, to ensure these demands are met in a timely and considerate manner.
While properties in college towns do see a lot of partying and wear and tear, these areas hold a lot of potential for big profits for a real estate agent. If you have never thought about investing in property located near a University, read through the pros and cons listed above and seriously consider the opportunity.
