The kind of consistent demand for rental homes observed in college towns is uncommon in real estate rental markets. Yet, every college town is distinct, and the ability of an owner to lease off-campus housing competitively would vary depending on the kind of institution.
Across 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 enticing. Even though this is frequently the case, there are some crucial considerations before starting your property search.
Learn about the local university or college
For example, it may be wise to research the campus and surrounding community before choosing one town over another. Gathering information on enrollment history, the school’s projected growth, the current and projected ratio of students to on-campus housing, and any planned developments can help you estimate any given area’s current and future potential.
Another essential aspect 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, which would lessen the demand for off-campus options. However, compared to the number of students attending, public universities may have fewer on-campus housing options but a higher percentage of local, part-time, or commuter students who don’t need or wish to house close to campus.
Understand the college town’s real estate market
In addition, it is critical to analyze 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 one of the most important elements.
Your ability to attract tenants and charge a competitive rental rate will be impacted by factors such as crime rates, amenities, the age of the home, and the most recent renovations. Another important element is knowing the tax implications of your purchase.
The current and future property tax amount must be included in the property’s cost, as must any required homeowners’ association fees. Additionally, you want to look 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 vary dramatically from place to place.
Create an investment and management plan
If your study proves worthwhile and you opt to move forward with a real estate purchase in a college town, you can drastically minimize your search parameters if you decide early on how much you want to spend, how much risk you can comfortably assume, and how much time you have to give to property management.
Owning a rental property requires a significant time commitment, primarily if you want to take care of most of it yourself. Rental homes in college towns are exceptional in that they have a high rate of turnover. Knowing that marketing, screening, and leasing your property will require a lot more work year-round, maybe even semester to semester, is crucial if students are your target demographic.
Hire a professional property manager
Alternatively, you can hire a quality property management company to manage your property. Significant advantages come from doing this, primarily if you want to rent to students. You can assign a team devoted to protecting your investment property’s value to handle tasks like placing ads, screening renters, exhibiting your property, doing regular maintenance, and handling tenant turnover.
At Real Property Management Traditions, we help Palmdale property investors such as yourself in determining the viability of looking at one or more rental properties in a specific neighborhood. We can offer you with the information you need to make the best choice possible because we have access to industry experts and market statistics. Contact us today or call 661-266-1400 to learn more.
Originally Published on October 4, 2019
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