Where to start?

Question

I live in a small college town and I'm interested in buying an investment property. However, there are a lot of large apartment complexes that cater to the college students and I'm sure that the rental market is very competitive. So I wonder if it is better to try and buy a property near the college and try to rent to students or if it would be better to buy property further away from the school and rent to families? Also when I buy a property what is a good way to determine how much to charge for rent?

Elizabeth Colegrove · Answer

it's like anything judging your risk versus return. For example we invest in military bases that have abnormally high rental rates versus house price. While there is some risk they will pull out the likely hood of that happening along with earning rates, is worth the risk.on the other hand, there are other military bases that the risk is still there and the returns are much lower, meaning it doesn't make sense. So look at college areas for not, is the earning worth the headahe, risk damage etc you'll have to deal with?

Brandon L. · Answer

@Dooreuhn Cee I totally agree with you, I have worked security in College communities, and they trash everything, and police are always visiting the properties.

@Stephanie Hairston I would not rule it out as an investment based on that, but I would strongly suggest quality insurance, and having the parents on the hook for any damages as well. Also a strong least that sets out specific rules regarding conduct, and strictly enforcing those rules.

I see investors all the time nearly doubling the market rent on a 4 bedroom house by renting to students, you just have to know what you are getting into and prepare for it.

Good luck

Dooreuhn Cee · Answer

I personally do not see the attraction in properties near colleges.  Sure, there are people at colleges that rent as there are at all other parts of an urban area.  College students are less than ideal to me because they are only likely to stay 1 year if not demand a 9 month lease, they are young and do not yet have appreciation for property ownership, and many are renting out their very first property so they have no experience.  Would rather have a family with stability.

Just my 2 cents.