College and Real Estate Investing
College and real estate have something in common. They are both considered to be the biggest and most important investments that a person will make in their entire life. Private colleges can cost over one hundred thousand dollars for only four years and this doesn’t even include housing and meals!
Student housing provided by colleges is typically inflated substantially on cost and many colleges will make their students stay in student housing for the first two years unless they are local. That is why parents will sometimes purchase a condo or town home for their children because in some instances, it is cheaper than paying for four years of student housing!
College towns have always been very popular for real estate investors because they have an extremely high ROI. In many cases, they can receive 4 different rent payments on a 2 bedroom apartment! This is a complicated lease but the rent received is worth the extra paperwork. Not only that, most landlords require the parents to cosign the lease in case the student spends their money on partying and not on the roof over their head. Most landlords in college towns also require a 1 year lease even though the student is in the apartment or house for 9 months out of the year.
According to Homefinder.com, below is the ten best college towns to invest in. They rated it by the lowest price per square foot:
• Baltimore, MD
• Grand Forks, ND
• Cleveland, OH
• Rochester, NY
• Buffalo, NY
• Lansing, MI
• Trenton, NJ
• Columbus, OH
• Saint Louis, MO
• Lafayette, IN
Baltimore is on the top of the list because the median price of property is only $11.46 a square foot! It is almost impossible to build anything for less than $100 a square foot. Not only that, Baltimore is close to four different large colleges which include: University of Baltimore, University of Maryland, John Hopkins, and Loyola University Maryland.
Lafayette has a higher price of $77.28 a square foot but is attractive since it is close to Purdue University which is a very large and prestigious college.
Another great benefit to having rentals for college students is that you are establishing brand recognition at a very young age. Your company will probably be the first place that they ever send a rent payment to. They will more than likely come back for other real estate needs as they grow older and look for other rentals with a name they trust. They may even come back to purchase one of your renovated retail start up properties or even purchase a condo from you when they retire.
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