NicheMarkets. Mult-Family in college town and near military bases

[Katherine Lankford]

Hello I'm a newbie.  I'm interested in multi-family investing. Has anybody done niche investing  like college towns or near military bases. Any tips or things to look out for? Looking in Georgia right now.

[Andrew Cushman]

@Katherine Lankford, overall Georgia is a great place to invest in multifamily (good demographic trends, business friendly, etc.). and as @Ryan Beasley and @Eva Oliver alluded to, there are lots of small, good markets scattered around the state.

While I own a lot of multifamily, I am not a student housing expert.  However, as long as you manage it properly student housing can be extremely stable, reliable, and recession resistant.  There are tons of smaller, good schools scattered all over the state that would make for good student housing investments.

I would be a little more careful with military housing, and even towns where the economy is heavily dependent on the military base.  While military cuts seem unlikely in the next 4 years, even something as simple as troop deployment (North Korea anyone?) or realignment can have a major impact.  For example, last year a couple thousand troops were moved away from Fort Benning in Columbus, GA.  For properties near the fort, this had a major impact as those troops and their families suddenly left (military personnel are allowed to break their lease if the move is due to the military.  So, if your property is 50% military tenants, it's possible your vacancy can go up 50% almost overnight!).  But here's where it gets really interesting: guess what the base did with their empty on-base housing?  You got it - they started renting it to the public at way below market rents just to have them full.  How do you think that affected nearby apartment owners?

Finally, lenders tend to be a bit wary of properties that have a "concentration" of any particular group such as student, section 8, military, etc.  So be prepared to possibly have to work harder to find a good loan.

Personally, I don't invest in military dependent properties, or small towns that are heavily dependent on a base or single industry that could shut down and kill the town's economy.  I'm not saying don't buy a property just because it's near a military base, just go into it with eyes wide open.  Always consider the possible downside!!

Good luck!

Andrew