College towns offer a unique demographic for property owners and investors. There are some solid reasons to buy an investment property in a college town, as well as some disadvantages to consider. When thinking about a college area, you can envision a bustling community of young adults. Many students who recently moved from home are looking to rent apartments or houses.
What are the pros of owning and renting a property in a college area?
There are many advantages to owning an investment property near a university or college. These include:
1. A steady demand.
College towns have a predictable rhythm when it comes to housing. There’s a steady demand and a large potential tenant market for rentals near the college. There’s a regular influx of students each year, and landlords can depend on the regular demand. Apartments and houses within walking distance to the college or university have especially high demand.
2. A stable rental price.
Due to the steady demand, landlords have an improved ability to count on a stable rent value. Alternatively, apartments or houses in other rental markets are subject to fluctuations in the economy and supply variations. Additionally, as off-campus housing is often times paid for by a parent, they are better able to afford a higher rent amount.
3. Lower vacancies.
With consistent demand, landlords experience fewer vacancies in a college or university area. There’s always another college student looking to rent. This can increase profitability, and reduce time involved in the rental process. The vacancies are also predictable. Landlords can expect turnover at the end of the school year, and can plan this into their business rhythm.
The setting around a college or university has many appealing elements. Landlords find they spend less time marketing the properties as they sell themselves. University and college towns have many benefits, such as proximity to college sporting events, art performances, and restaurants or nightlife. Many find college or university areas have their own energy, which draws prospective tenants in.
Now that you’re familiar with some of the pros of investing in a college town, what are the cons? There are a few cons, some of which you might expect based on your own college experience….
1. Increased Wear and Tear.
With younger renters, and those that are renting for the first time, you can anticipate some increased wear and tear on your property. Some college students aren’t known for their cleanliness and organization, especially when living with friends. There can be increased clutter, which may or may not cause additional wear on carpet, walls, etc. Beyond messiness, college students may cause damage to your property. Excessive alcohol consumption, lack of maturity, or reliance on a parent to pay any bills associated with damages may impact the mindset of college students renting your property. Ensure you collect a security deposit to cover any expenses associated with college renters. Understand your state laws regarding deposits, and plan with this in mind, ensuring you don’t overburden potential tenants.
2. Seasonal Vacancies.
Though there is high demand for rental units near a college or university, landlords can anticipate vacancies at the end of each school year. That being said, many students will renew leases and find comfort and stability in staying put. Though there may be increased vacancies, most landlords note that it is easy to find new tenants for university properties. There’s always demand.
3. Demanding Tenants.
As most college students are new to renting properties independently, they may be more likely to contact their landlord with questions, or requests for help. With seasoned renters, they tend to solve minor challenges themselves, such as light bulb replacements, or batteries for thermostats. Where college students may be less familiar with simple fixes to easy problems.
The pros of investing in properties in a college town can be substantial and are something to consider. Though there are cons, many landlords find the pros outnumber the cons. With landlord software such as Schedule My Rent, landlords are able to collect rent online and automate many rental tasks so landlords can focus time on increasing the value of their investments.