College towns are among the most attractive regions to invest in property. Unlike investing anywhere else, buying property around a college town comes with unique opportunities. Though you get numerous benefits from it, the investment also has special challenges. That is why it is crucial to weigh the merits against demerits to help you determine if it is an investment that is worth making.
The rate of appreciation attracts a lot of investors to property in college towns. As an investor, you probably want to make high returns during the ownership period. Properties located in college towns can make your money grow due to significant appreciation. This is because the schools around such property support the local economies.
Apart from enjoying steady appreciation, you get a large tenant pool. These towns have a large population of students and workers. Every semester, new students join colleges and they look for rental areas near the school since getting hostel accommodation is a hassle. Investing in a college town, therefore, means you get a lot of prospective tenants effortlessly.
You can also achieve stable rent. Since rentals in college towns are on high demand, rental prices are high making it easy for you to gain from your investment. You can collect a good amount of rent from each rental apartment since the students’ parents have to ensure that they are children are living off-campus comfortably.
The rate of vacancies is also low at college towns compared to other areas. This is because college students attend semesters in turns meaning even when one lot is on long-holiday, new students are still available to occupy your rental property. Employees also look for areas around the college where they can live while working in the school. College towns sell themselves meaning marketing is not a priority for an investor. The amenities within this town often attract a lot of people.
Though investing in a property within a college town can give you all that, tenant turnover is a challenge. You may have a large rental market, but the tenants you often get are not long term. Students tend to change housing between the time when they are in session and when they are not. It means that as an investor, you may experience vacancy challenges when this happens. Not many tenants in college towns sign long leases since their stay is not permanent.
Finding people to occupy your investment property during the off-season can also be challenging. Most students do not attend college during the summer meaning some houses may remain vacant for some months. To avoid this, let a tenant sign at least a one year lease in place of a month-to-month lease so that they can continue paying rent even when they are not in session.
Once you have weighed these merits against cons and decided to invest in property within a college town, it is time to get a second opinion and financing. Consult Thomas Kish business credit solutions to learn more on this form of investment and obtain a line of credit.