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Home > Real Estate Investment > Buying Property in a College Town: A Savvy Investment

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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