Few real estate rental markets can offer the kind of consistent demand for rental homes found in a college town. However, each college town is unique, and different types of institutions will affect 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 enticing. Although this is typically the situation, there are a few critical considerations before starting your property search.
Learn about the local university or college
Before deciding on one town over another, for illustration, you should research the campus and surrounding community. Obtaining 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 assist you in evaluating a specific area’s current and future potential.
Another critical factor 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, decreasing the demand for off-campus options. However, public universities might have less on-campus housing than the number of students attending but may have a significant ratio of local, part-time, or commuting students who aren’t looking for or prefer a house close to campus.
Understand the college town’s real estate market
It is also imperative 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 surrounding neighborhood are among the most essential factors.
Criminal activity, services, the age of the house, and the latest improvements have an impact on your ability to attract tenants and charge a competitive rental rate. Another crucial component involves comprehending the tax implications of what you buy.
The current and future property tax amounts have to be reflected in the property’s cost, as must any required homeowners’ association fees. You must also examine any restrictive codes or laws that might prohibit you from renting out the property; every city and town has its particular set of regulations that can differ considerably from place to place.
Create an investment and management plan
If your study is positive and your choice is to make a real estate purchase in a college town, you can substantially narrow your search parameters if you determine early on how much you want to spend, how much risk you can comfortably assume, and how much time you must commit to property management.
Owning a rental property requires a significant amount of time, particularly if you want to do the majority of the work alone. Rental homes in college towns are distinctive in that they have a high rate of turnover. If students are your target demographic, you should be aware that marketing, screening, and leasing your property will need a significant amount of effort year after year, if not semester after semester.
Hire a professional property manager
Rather than doing everything yourself, you may hire a quality property management company to manage your property. Doing so has actual advantages, mainly if you want to rent to students. Placing advertisements, interviewing renters, presenting your property, accomplishing basic maintenance, and handling tenant turnover can all be delegated to a team devoted to protecting your investment property’s value.
At Real Property Management Richmond Metro, we help Richmond property investors like you determine if considering one or more rental properties in a specific region is a good investment. We have market information and experts in the field who can deliver the information you need to make the best possible selection. Contact us today or call 804-823-8882 for further information.
Originally Published on October 4, 2019
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