Investing in College Towns

[Matthew Konkel]

Hey everyone, 

I was looking into buying a duplex or single family home in a small college town of about 20,000 people and the school size is about 30,000. During the summer 90% of the university students leave, not sure if that means much if I advertise a 12 month lease. The town revolves about the University not to much here besides the University and a engineering facility. 

Just wondering everyones pros and cons of buying in a college town! 

[Nate Monson]

Hi @Dan Talmi I am an agent in Albany, NY. The student market is generally very lucrative here. SUNY Albany and St Rose create a very high level of demand for student rentals in the area. That being said I have been hearing that the schools might not bring everyone back to campus right away. So there could be some decreased demand. The numbers on a typical student rental look like this... Purchase price: 225k, Rents: $2800-$3000 monthly. Operating costs are usually generally hover around $1100-$1300 and your mortgage would account for another $800-$900. You can usually make most student rentals cash flow $1000 per month if you get it at the right price. Some challenges are finding a property manager if you need one. There are those who do it but aren't that good. And those who are good usually don't like to deal with students around here. I find managing it yourself to be the best way to go generally. Please feel free to reach out if you have anymore questions about Albany student rentals!

@Matthew Konkel in generally I think pros of student rentals are that you can get more rent than long term rentals in many markets and depending on the situation a lot of the times the rent is very secure. Whether it is parents or a student loan paying for the housing. Downfalls are that you generally have more work to do in terms of turnover and management. Other things to watch out for is making sure you have accurate rental rates. In my market the rent is paid monthly year round (even when the students aren't there). In other markets they may advertise it as "X monthly" but in reality they get semester payments and don't get paid for the summer and winter. Despite some negative I believe college rentals are a great investment avenue. Hope this helps!