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When considering an investment of real estate, college areas may be the last thing to come to mind. You may be thinking, “why would I purchase a property just to rent it to party-heavy teenagers?!” But statistics show that investing in college town properties has far more to offer.

In the real estate industry, your choice of neighborhoods is exceptionally crucial to your success. Different areas and regions offer different pros and cons for your investment. Carefully compare and consider both of the advantages and disadvantages of each property before deciding to purchase.

While college town real estate can be a potentially lucrative investment, using location-focused searches can help you gain an understanding of the specific accommodations and pricing of certain areas. However, the advantages and disadvantages of the near-college real estate are rather universal.

Potential Disadvantages:

  • Tenant Turnover – Most students return home over summer break, so it is possible that there will be higher rates of tenant turnover. However, the total vacancy time is likely to be lower than usual.
  • Property Damage – This is far from the standard, although college students do possess a lot of time, energy and interest in recreational activities. To avoid damage, consider requiring a security deposit.
  • Off-Season – There may be times of low college attendance that could impact the amount of tenant interest and therefore the increased volatility in your incoming revenue.

Potential Advantages:

  • Property Sells Itself – Outside of the university pull, college areas are typically highly populated and filled with nightlife, restaurants, shopping, gyms and more. These features substantially increase the attractiveness of the property.
  • Renters Overload – In fall of 2017, 20 million people enrolled in a college or university– 5 million more than seven years prior. On top of the prospective students, there’s university staff, faculty, and graduate students.
  • Payments – While you are renting to college students, a significant portion of them are financially supported or helped by their parents. This increases the likelihood of consistent and timely payments.
  • Property Value – This is not a guarantee, but a stronger possibility than in other areas. Over time, as universities prove it’s stronghold, more businesses emerge attracting more students. After graduating, students may choose to stay in the area. As the area improves over time, your property value rises.
  • Rental Standards – This isn’t to say that you should be a slumlord, however, it is important to note that college students are not typically worried about luxury amenities. Keep the property clean, safe, and amenities decent, and you probably won’t hear a complaint.