In a college town, the consistent demand for rental homes is extraordinary, making it an appealing option in the real estate market. However, each college town has specific features, and different types of institutions can influence an owner’s ability to lease off-campus housing competitively.
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 appealing. Even though this is typically true, there are some important considerations before starting your property search.
Learn about the local university or college
For example, it would be a good idea to research the campus and surrounding community before making a choice among various towns. 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 help you assess any given area’s current and future potential.
It is also worth considering 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, lessening the requirement for off-campus options. On the other side, public universities might have less on-campus housing in relation to the number of students attending. However, they often have a substantial portion of local, part-time, or commuting students who do not need or prefer to house close to campus.
Understand the college town’s real estate market
It is worthwhile to consider 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 extremely vital.
The incidence of crime, services, the house’s age, and the latest improvements may all influence your ability to attract tenants and set a competitive rental rate. It is also important to consider the tax implications of your purchase.
Make sure to factor in the current and future property tax amount in the property’s cost, as must any required homeowners’ association fees. It is also vital to be familiar with 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 widely from place to place.
Create an investment and management plan
If your research is favorable and you opt to continue with a real estate purchase in a college town, it would be helpful to determine beforehand how much you want to spend, how much risk you can comfortably assume, and how many hours you have to spend on property management.
Owning a rental property can be quite demanding, especially if you prefer to handle most of the tasks on your own. Rental homes in college towns have a distinct characteristic of experiencing a frequent turnover. If students are your target demographic, you must remember that there will be a significant amount of work connected with marketing, screening, and leasing your property on a yearly or semesterly basis.
Hire a professional property manager
If you’re not up for doing it yourself, consider hiring a quality property management company to manage your property. Doing so has some real perks, especially if you are considering renting to students. By entrusting the task of placing ads, talking to renters, showing your property, carrying out routine maintenance, and handling tenant turnover to a dedicated team, you can ensure the protection of your investment property’s value.
At Real Property Management Viking, we are here to assist Minnetonka property investors like you in making informed decisions about rental properties in a specific area. We have a team of knowledgeable professionals and access to extensive market data to assist you in making informed decisions. Contact us today or call 612-230-3953 for more information.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
