Advise college town rental opportunity with appreciation in mind

[Kiran Chaudhari]

Hello,

I am an investor recently joined to biggerpockets and looking for any suggestion to pick college town rental opportunity with appreciation down the line.

Thank you,

Kiran

[Scott Dixon]

Hi @Kiran Chaudhari,

I can only speak for more than my local area which is the home of the University of Illinois and would be classified as a classic Big Ten college town.  we have seen over the past 5-10 years a large influx of investment.  Our enrollment numbers have increased over the past 5 years but I would say the number of "beds" coming online every years are 3 to 4 times that of enrollment.  This has shifted the market substantially.  10 years ago the vast majority of students would sign leases in Sept and Oct for the following school year which started in Aug.  Now many students wait till the Spring and Summer to sign and have plenty of options with incentives like no security deposit or 1st months rent free.  

I would strongly encourage you to sit down with a local investor for the market(s) that you are interested in and get a lay of the land.  I am sure there are still great of markets with opportunity but for my 1 data point here in Champaign Urbana many of the experienced investors are pausing or even selling properties till things cool down a bit.

All the best,

Scott Dixon