Benefits Of Buying-To-Rent In A College Neighborhood
Posted on: 14 April 2017
Many people think it's not advisable to buy properties near colleges. It's true that college neighborhoods tend to be noisy and highly populated because of their student communities. Some of the neighborhoods may not be too tidy either. However, those things should only concern you if you are buying a home to live in. If you are buying an investment property, a college neighborhood can offer you numerous benefits, such as these four:
Ready Pool of Tenants
College neighborhoods tend to be more populated than other neighborhoods. The students, university staff, and owners of related businesses all need places to live and will provide you with a ready pool of tenants. This pool of tenants will result in low vacancy rates, which is every real estate investor's dream.
However, you should know that students change rooms very often; some move into a new house every academic year. Even those who don't move that frequently will eventually complete their education and move. Therefore, be prepared for high rates of tenant turnover if students are your main target clients. This also means that you should be prepared to be a hands-on landlord since you should be available most of the time to deal with tenants who are leaving or coming in.
Low Marketing Budgets
Another great thing with college neighborhoods is that they often market themselves. People know college neighborhoods know that they will be getting great transport networks, excellent entertainment spots, and a large number of eateries and shopping amenities. Therefore, you don't have to invest too much in marketing your rental property. Most landlords in college neighborhoods just list their properties in local real estate listings and wait for tenant applications.
Value Stability
Lastly, properties near colleges rarely lose their value. This means even if you decide to sell your property a few years after purchase, you aren't likely to experience any loss. This is true as long as the anchor college is established and has given rise to associated businesses in the area. In fact, if the university is growing, you may also expect an appreciation in your properties value. Just make sure you maintain your property properly because students aren't known for the care they give to their rental places.
As usual, you need to follow due diligent when buying a property. Ensure that the house is inspected and meets all the requirements of your target market. Otherwise, you may lose your investment when your house becomes the only one without tenants. A realtor can help you ensure your investment doesn't go down that sad path.
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