Buying Property in a College Town: A Savvy Investment?
It's no secret that families with school age children often look for
properties located in close proximity to schools. You may be surprised
to learn; however, that it can be a good idea to look for a home located
near other educational centers, such as colleges and universities in
order to solidify the investment potential of your home purchase.
One of the main reasons why homes located in neighborhoods around
colleges and universities is a good idea is simply a matter of dollars
and cents. At first glance, homes located in these areas are more
expensive than homes located in other neighborhoods. That doesn't mean
they are not a good investment; however. Quite the contrary, if nothing
else, you can usually count on the fact that demand stays consistent in
college towns.
This is especially important considering the transitional nature and
cooling off the current market is experiencing. While home owners in
many geographic locations are reducing their prices and experiencing
longer periods of time on the market as they attempt to sell their
properties, the demand for properties in college towns has remained more
consistent. In addition, you can typically anticipate that demand for
housing in college towns will not only remain steady but increase as
time goes on. You won't have much competition to contend with when you
opt to sell your home either because the inventory of homes for sale in
college towns is generally limited. Quite frequently college towns are
subjected to zoning restrictions and regulations that restrict the
growth of housing.
In comparison to the limited supply of housing in college towns, you can
virtually rest assured demand will remain the same if not increase. More
and more families are placing an emphasis on the importance of a college
education. More students than at any other time period in history are
attending college. Furthermore, college enrollments are expected to
continue rising at least through the next decade. With zoning
restrictions and limited available land, the supply of housing simply
cannot keep up with the demand.
You may be tempted to think that just because enrollments are up that
doesn't necessarily mean the demand for actual houses is up. After all,
don't single college students prefer apartments or dorms? To a degree,
yes, this is true. That philosophy doesn't take into account the rising
number of adult learners as well as the increase of professional and
graduate students; however. Married undergraduate students, professional
students looking to continue their education and graduate students are
all looking for the stability and tax incentives a traditional home
purchase can provide. If you elect to re-sell your home later on down
the road you can be sure your home's value will hold its own if not
appreciate with these demographic groups. On the other hand, you also
have numerous income opportunities available to you if you should decide
to rent our lease out the property. Professional and adult college
student renters are less likely to party and damage your property.
Don't overlook the possibility of selling or renting to college and
university staff as well. These individuals provide you with another
resource regardless of whether you choose to hold onto your property and
simply rent it out or sell it at some later point.
In many states there has also been an increase of parents purchasing
houses for their college age kids. Purchasing a house for your college
bound child certainly makes a lot of financial sense. Parents can write
off the interest for these home purchases on their taxes and recoup
their investment, if not make a profit, when they resell the home after
their child graduates. In the event your child has roommates you may
also be able to collect rent in order to defray the mortgage cost.
Finally, don't forget that college towns are increasingly becoming
popular as retirement centers. While the idea of a college town becoming
popular with retirees may seem incongruous consider the demographics of
who is retiring these days. Baby boomers reaching the age of retirement
are often not content to while away their golden years in a rocker. They
are more active, wealthy and intellectual than their predecessors. These
retirees prefer the intellectual activity and stimulation living in a
college town can provide. This makes them the perfect buyer for your
investment property.
When considering the purchase of investment property in a college town,
do make sure you take the time to do your homework first. Large urban
and metropolitan areas can end up being more trouble than they're worth
simply because of their complexity. Instead look for towns connected to
universities and colleges with increasing student populations and which
have a reliable economic and transportation network.
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