Investing in a college town. Why not?

[Ben Theriault]

Hi all!

I'm trying to get into real estate and all of the resources I've been reading/listening to have said some of their best advice was learning the market. I was looking in areas where property was reasonably affordable in southern Maine but then I had a thought.

I am a recent college grad and I know the neighborhoods of my college town about as well as the town I grew up in. The more i think about it, my alma mater is growing steadily over the past 5 years, there is a constant inflow of tenants, and real estate prices appear to be incredibly reasonable.

However, I am typically an optimist and when I get into these modes I have a hard time seeing the bad side. So to any investors in college/university neighborhoods, what have been your largest/most consistent challenges? Is it just high turnover and possible damage? Or is there more I am struggling to see?

Thank you!

[Spencer Gray]

We like investing in college towns that have additional economic drivers beyond they university. We also target not undergrads/students as most of the attention in those markets is towards students.

We've found that the market rate rents float higher in college markets compared to non college towns because of the upward rents of student housing that are charging by the bed vs by the unit. 

We have had a lot of success with this strategy.