Real Estate Investing has long been one of the most popular methods for generating wealth. Whether it’s fixing and flipping a property or buying and holding as a rental, the fact remains that investing in real estate is an excellent way earn an income.
College towns can be that easy and feasible way to earn an income through real estate investing. With a consistent influx of renters and stable rent prices, college towns are the perfect investment location. And whether you are new to investing or a seasoned pro, you know the key factor to any real estate investment is location, location, location!
Although there can be drawbacks to renting to college students such as consistent renter turnover, wear and tear of the property and well, college students, I believe the advantages outweigh these.
Here are four advantages to consider when looking for your next investment property:
- High Demand for Rentals
Many colleges don’t offer enough housing for all students, including graduate students, leaving many looking for a place off campus to call home. With the high demand for a rental some students may re-new their lease for the next school year even before the current one comes to an end. If you have responsible renters looking to sign the lease again, this cuts back on any time spent looking for new tenants. If the students are not looking to renew the lease, or are graduating, you can request to be notified of such changes earlier in the school year. This way you will have plenty of time to look for new renters, even before the current students leave for the summer.
- Large Pool of Potential Renters
The bigger the school, the larger the pool of prospective tenants will be. With each new semester, new students will enter the college town and into your pool of potential renters. This also allows for a stronger screening process to find the most responsible tenants possible, as you may have more flexibility to require higher deposits and rent prices.
Holding a rental near a college campus also opens the door to renting to professors, college staff and graduate students as well.
- Consistent Rent/ Income
College students more often than not will be more open to paying higher rent for a home located closer to the campus. Another added bonus to college students is that many times they come with a valuable advantage, also known as their parents. Many landlords will have a prerequisite where the parents are needed to co-sign the lease with their college student. It may never come down to it, but you as a landlord will feel more secure knowing if the students cannot pay rent, the parents will be on deck to help.
- Location Self Markets
An added bonus to renting a home near a college campus, the location will market the home for you. When listing the home make note of the different amenities college students will find appealing such as near-by places to eat, shop, public transportation and entertainment sources, like bars, movie theaters, etc. By highlighting how your home is walking distance to any of these amenities, renters will be impressed with the overall area, thus impressed with your rental home.
Overall, invest wisely and do your research on the college and surrounding area. Find out the ratio of students who live on-campus versus those who live off-campus. Look at the local real estate market, are there other investors renting to students? Ask around about their vacancy rates and rent prices, as this can help you determine if the area is the right place for you to invest in.
When you’ve completed your research and are ready to invest in a property to buy and hold as a rental unit, RCN Capital is here to be your go to Lender. As the nation’s premier direct private lender, RCN Capital fills a void in the marketplace by offering short-term commercial loans to fund the purchase of non-owner occupied residential and commercial properties. We also provide rehab financing and bridge loans. By offering custom loan programs and streamlined underwriting, RCN gets you the funding you need, when you need it.