With summer coming to an end and fall just around the corner, kids and parents alike have prepared for school. From shiny new school supplies to stylish new clothes, the beginning of the school year can often feel like it’s sucking your bank account dry. What if it could be just the opposite though? Have you ever considered investing in real estate in a college town? Here are some pros and cons that you may want to consider:
- Sizable Tenant Pool- Housing can be a hot commodity in college towns. Each year tens of thousands of students move to these areas across the country. This allows for a large pool of prospective tenants who will be competing for the opportunity to rent your property. This could mean that you can be more selective as to who your rent to and allow you to rent your property faster.
- Consistent Rent- Due to the high demand of housing for students and those associated with a university, properties in these areas generally retain their value well. This means that rental prices tend to stay stable unlike other markets which may experience more flucuation that could affect what landlords can charge. Something else to consider is that many parents pay for their children’s rent. This may mean that you can get by charging a little higher rent since a parent’s budget tends to be larger than that of a student.
- Easy Marketing- College towns tend to sell themselves. They bring an assortment of activities and entertainment options to the area which can draw people in. Many dining and shopping spots are easily available too. Students often don’t have access to cars, so public transportation is readily available. All of these work together to create a lifestyle that can be very attractive to potential tenants.
- High Turnover- Tenants tend to be short-term. Students are known to move around a lot in college, often switching roommates, living on campus vs. off campus, etc. The student population rotates with each new semester and it’s unlikely to have a tenant sign a lease for more than a year, if even that.
- Seasonality- There is obviously an influx of students needing housing in the fall. It’s very likely to see a slow down during the summer months when many students return home. You’ll need to plan ahead for potential vacancies during those slower months.
- Wear and Tear- It’s no secret that students can be hard on a property. Add into the mix large parties or the fact that mom and dad are paying the rent, and things could get pretty bad. It’s not uncommon for damage to exceed the security deposit. As the owner you will care much more about the property than a tenant, especially a young college student.
Are you ready to go back to school? If so, The Peters Company would be honored to help you learn the ins and outs of investing in college towns! Give us a call today at 404-419-3619!