College Town Investing

[Account Closed]

I am interested in hearing opinions on investing in a college town these days. 

For those of you that have rentals in college towns:

1. What sort of impacts has COVID made to your business (good or bad)

2. What pitfalls in general have you seen with investing into a college town (or college area of town)

3. Are you trying to get out of this space, buying in, or holding

4. Do you prefer to operate in SFH and small multi-units or large multi-units?

I would also love to hear from anyone, even you do not specifically have these types of properties.

[Joseph Cacciapaglia]

I started off investing in a college town, but made the decision a while back to get out of the space. There is a large dip in college aged kids coming in about 5 years, there's a college debt crisis, and a move to online learning and less traditional programs. I thought these were primarily long term issues, but COVID might have sped up some of them.

1. What sort of impacts has COVID made to your business (good or bad) - I had already moved out of college town investing, but now I'm very happy I did. I think a lot of schools are going to have decreased enrollment. At least some students have realized that they thrive with online education. They may never return to college towns. Many colleges are talking about not coming back in the fall, or only coming back in a limited fashion. I think this will crush some of the smaller towns.

We do have a recession, which usually means higher education enrollment. I'm just not sure that happens this time around, and if it does, it may be mostly online.

2. What pitfalls in general have you seen with investing into a college town (or college area of town) - A lot of properties near colleges only make sense when you rent them by the room. They won't cash flow as traditional rentals. The rent by the room model has always had it's challenges, and I think this situation will exacerbate many of those. What do you do if one of your rent by the room tenants gets COVID?

3. Are you trying to get out of this space, buying in, or holding - I already exited. I think prices would really have to crater before I was attracted to the space again.

4. Do you prefer to operate in SFH and small multi-units or large multi-units? - I've always preferred multifamily. I like the scalability, and the fact that you're not competing against owner occupants when purchasing them.