College towns are great places for real estate investments because they have a steady stream of students and faculty in need of housing, as well as having the potential for growth as the universities expand. College towns are inviting even to those concerned about a location’s job market. Many retirees in fact are choosing to move to college towns because of the variety of cultural and lifestyle benefits college towns offer. The U.S. population is expected to grow about 1 percent a year between now and 2050, but towns and cities with large universities will grow at three times that rate.
According to The New York Times. “With demand for private student housing expected to remain strong for the next several years, industry experts say, investors can almost bank on steady rent increases regardless of economic conditions or the interest rate climate.” Additionally, the cap rates will often exceed those of multifamily homes. student properties in lancaster
As universities grow because of the increasing student body population, onsite housing is often insufficient to meet the housing needs. Many students are either forced to or choose to live off campus. These students make up a steady stream of potential renters. Because of the high demand for off campus rentals in college towns they are often less vulnerable to housing price declines than non university towns.
When renting to students, be sure to get a substantial deposit to cover damage and cleaning costs, or in case your tenants decide to stop paying rent. Students may not be the easiest on your property so be sure the security deposit you collect is adequate.