Buying property is always an exciting thing. Whether you’re buying a home or an investment property, buying property in a college town can be an excellent choice. With that in mind, there are quite a few pros and cons to keep in mind when making a decision like this.
For the average person, property can be broken down into one of two categories:
- Personal property.
- Investment property.
When you buy property in a college town, these two types of properties are certainly the types of properties most people will consider. Of course, an investment property can take on a wide range of connotations, when buying in a college town, most people immediately consider student rental properties. There’s so much more to the story than students in college towns to consider though. Before you set your sights on any type of property in a college town, though, it’s a good idea to explore the pros and cons.
Buying Family Homes in College Towns
Buying family homes in college towns can be a wise investment. Most colleges invest heavily within their communities and offer opportunities for families to enjoy that would otherwise not be available in cities of the same size.
Benefits of Buying Family Homes in College Towns
Buying a home for your family in a college town may seem a little counterintuitive. However, college towns often prove to be amazing communities in which to raise families. There are many reasons for this including the fact that many colleges operate much like cities of their own.
This means that much of the “college traffic” is somewhat limited to the college areas and most students are seeking homes and apartments close to campus to keep their costs down and allow greater access to college amenities (library, internet access, etc.).
The bigger picture reveals that a large portion of the community involves businesses that support the college and that the college supports. It means there are generally jobs available within the community and that there are abundant opportunities for children and families living in these communities. Below are just a few of the benefits of buying homes in college towns.
- Lower cost of living. Because the community largely caters to college students you will find affordable housing, groceries, and other necessities.
- Culture. Colleges bring a strong arts community, music culture, and impressive quality theater products to the community. These things elevate the community, provide learning opportunities for your children, and allow you to enjoy cultural activities you would otherwise have to drive much further to enjoy.
- Abundant entertainment opportunities. Because you have a large number of college kids flowing into the community each year, your community hosts many businesses that cater to them, including businesses that are great for family entertainment such as bowling alleys, movie theaters, activity centers, bounce parks, water parks, and more.
- Excellent dining options. Because there are so many college students coming into the community each year, you have more dining options than a typical town of your size would offer. This offers you greater variety and provides college students with jobs so they can go into the community and spend at local businesses when not in class or working.
- Sports and athletics. Even if you don’t have children in sports, you still have the opportunity to enjoy a wide range of sports opportunities as spectators. From things like football, basketball, and soccer to ice hockey, gymnastics, track and field, and volleyball, there is surely something to appeal to sports lovers of every kind in a college town. If you do have children, you can expose them to sports they may not otherwise experience.
- Educational opportunities. One of the greatest benefits of buying a home in a college town is the proximity it presents for you to advance your own education, satisfy your curiosity by attending lectures and symposiums, and otherwise enrich your mind.
- Excellent health care. With so many colleges offering medical school, nursing programs, etc. it is likely that your hospital offers cutting-edge technology and excellent care as it is also a center of learning.
Despite the many benefits of living in a college town, there are some considerations to keep in mind before buying a home in a college town as well.
Cons for Buying a Family Home in a College Town
It’s not all sunshine and ticker-tape parades when you buy a home in a college town. There are some negatives that you must consider before making your decision. These are some of the considerations you might want to keep in mind.
- Larger crowds when school is in session. If you enjoy quiet and privacy you may find that the noise and traffic college students bring with them is a distraction for you and the family life you want to create. The truth is that most of your favorite places are more crowded when school is in session and that can be a problem for many families.
- Greater competition for certain types of jobs. This is usually a bigger problem for entry-level positions for high school students in college towns than for professionals. However, it can be a problem if you hope to teach your children the benefits of working for the things they desire in life. It’s not impossible, especially if you make connections in the community. It is, however, a little more challenging.
- Drunk driving. While no one likes to think of it, it is a fact that many college students go out and drink, then drive while under the influence. This can cause a huge uptick in accidents and fatalities. It can also sour your ideals of living in a college town.
- Challenging housing options. Finding the right house can be a little more difficult in college towns as many family homes have been reconfigured to accommodate multiple college students. These additions, separations, and interesting living arrangements are often not family-friendly and will have to be repaired or replaced before you can move your family into the home.
- Parking. One of the final considerations to bear in mind when you live in a college town is the challenge of parking. With many residential homes now accommodating 6 to 10 college students with vehicles of their own, the parking situation can become problematic.
The good news for many is that the benefits or “pros” of buying a property in college towns far outweigh any doom and gloom the negatives or “cons” of doing so if you want to move your family in. Now it’s time to explore the pros and cons of buying an investment property in college towns.
Buying Investment Property in College Towns
For many real estate investors, college towns represent infinite dollar signs. You might even feel as if the more properties you purchase, the more money you can make. It isn’t all rainbows and ponies, though. There are quite a few pros and cons to keep in mind before you make your decision to buy a college town investment property.
Pros of Buying Investment Property in College Town
There are quite a few benefits to investing in college town properties. These are just a few of the top benefits to keep in mind as a new or experienced investor.
- Instant income in most cases. Many people buy property in college towns that is already leased for upcoming school years to multiple tenants. It is not uncommon to see anywhere from six to eight tenants in a single home near the college. Some of them have already signed multi-year leases.
- Property value appreciation. Appreciation is always a good thing when it comes to property. If you manage to purchase property near the college, you’ve likely invested in a gold mine. The closer to the college, the better, though any property in a college town can support students, professors, and local professionals who aren’t quite ready to buy. That means the value of the property will continue to go up and up and up.
- Potential for strong and steady rental income. The bottom line is that rental properties are always in demand in college towns. The better kept your property is, the greater the demand will be.
- Vacancies are rare and short-lived. There are almost always people looking to rent or lease properties in college towns. As long as you keep your properties in decent repair, charge fair rent prices, and offer some sort of curb appeal, demand should be high for the property you offer.
- It’s fairly easy to sell homes in college towns if you find you need to liquidate your assets for cash. These are high-demand areas for real estate investors and can often sell within a matter of days going on the market – especially if you have advance leases for the upcoming school year and beyond.
While investment properties in college towns can be highly profitable, there are quite a few considerations to keep in mind.
Cons of Buying Investment Properties in College Towns
Now for the rest of the story. There is a great deal of financial promise when it comes to investing in rental properties in college towns. There are also plenty of considerations and drawbacks to keep in mind. These are a few of the top problems to consider when investing in college town properties.
- Turnover rates. Many college students quickly discover that the rigors of academia are not for them. This means they will often return to the comfort of home and leave you high and dry after the semester begins (and when demand is at its lowest). You need to create year-long leases that make students and their cosigning parents responsible for the costs even if the student vacates the property.
- Destructive nature of student life. College students aren’t that careful of their own property – much less someone else’s property. This means you may need to make quite a few repairs or replace many damaged appliances along the way.
- Not a “hands-off” investment. Many people invest in real estate hoping it won’t be a lot of work. If you have a ton of students living in a single home, it is going to be a lot of work. If you’re looking for a passive income investment, you’ll want to consider investing in parts of town that are unappealing to college students or hire a property management company (which greatly cuts into your income from the investment).
- You must keep up with local ordinances. Local, state, and federal requirements for landlords must be met even when providing housing for college students. You are responsible for staying up-to-date with these requirements and providing a safe living space for your tenants.
- Summer. One of the most difficult aspects of rental property ownership in college towns is the summertime. Even with year-long leases, there are mass exoduses at the end of the school year as many students return home for the summer. This can leave you scrambling to find tenants to fill those rooms if you don’t have an iron-clad yearlong lease that makes them responsible for those months whether they live there or not.
Buying an investment property in a college town isn’t the right choice for everyone. You need to weigh the pros and cons to see if the income potential is worth the possible pain you’ll have to experience in the process. Many investors do find it favorable and make incredible sums of money in the process.
There are many pros and cons to weigh if you’re considering buying a property in a college town. This guide will help you sort through them so you can make informed buying decisions.