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Is owning a rental property next to a college campus a wise investment?

Considering the continual tenant turn-over and the potential abuse the property may undergo, is it worth the time and effort to own and rent out a house to college students?
Tue May 22 2007, 00:02 - Palo Alto - Home Buying - 5 answers
 
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Brian Sparr
Real Estate Pro
in Walnut Creek,...
Brian Sparr, Real Estate Pro in Walnut Creek,... in Walnut Creek,...
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Sunil received BEST ANSWER
A better target market in college areas are visiting professors. For example, a large number of Stanford lecturers are in town on 3 or 4 year contracts, some as short as 2 years. Most of them make great salaries and are good tenants.

Fri May 9 2008, 14:30
 
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Good answers here already but one thing to add. If you find the numbers work for you and you wind up buying, if and when you wanted to sell, parents of in-coming students sometimes want to buy. That way their family member's room and board is handled in the way of investment property. Gives them one sure tenant for three or four years (as long as they don't flunk out!) I have had many clients tell me, for example, that they have purchased homes near Ohio State for their young adult children when they attend school there. Good luck on your research and your purchase.

Wed May 23 2007, 18:15
 
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Roberta's right, the pool of tenants continually renews itself near a college. One of my investor clients requires parents to co-sign for kids, which helps mitigate the damage issue. Another brilliant idea that he came up with? While his own daughter was in college, he bought a 4 bedroom condo. Allowed her boyfriend to live in one of the bedrooms for free PROVIDED he kept the other two rooms rented at all time and that they paid on time. He never had a late payment. =)

Tue May 22 2007, 18:02
Web Reference: http://www.leighbrownandassociates.com/blog
 
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BEST ANSWER
Yes in the long term real estate prices go up, where supply is limited and demand continues to grow. Buying next to Stanford is a given that the price of the property will go up over time. However, before you jump in you have to run the numbers to figure out if this investment will work for you. Try plugging in the numbers into my real estate investment analysis spreadsheet. Put in your assumptions for appreciation growth rates, tax rates, and operating costs. If the end result is something you like and you can afford to carry the property for the duration you plan to keep it, than go for it.

good luck!

Tue May 22 2007, 11:19
Web Reference: http://www.sunilsethi.com/Calculators.htm
 
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Brian: A wise real estate investor once told me the best bread and butter rental properties are those located next to college campuses, hospitals and other major employers. You'll be guaranteed continued occupancy if the property is well maintained. Be sure to collect good damage and security deposits.

Tue May 22 2007, 06:50
Web Reference: http://www.LuxuryHomeDigest.com
 
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