If you have kids in college, or kids about to go away to college and you’ve looked at the price of on-campus housing these days, you may have thought to yourself, “boy that’s expensive.” Then, the investment side of your brain kicks in and you start to wonder about the potential return on buying a house near the college and renting it out to your daughter and five of her friends.
If you’ve mulled over thoughts like these, rest assured, you’re not alone.
According to an informal survey of Coldwell Banker agents conducted last year, more than one-third of agents across America have clients looking to buy properties for their children near their colleges.
Low interest rates and affordable housing prices have combined to make buying a rental property in a college town sound like a tempting proposition for parents who may be thinking of not just the savings from on campus housing fees, but from the long term rental income and tax write-offs.
But, before you start real estate shopping, don’t forget about one of the biggest considerations, the location of the rental.
The location of a chosen rental home can make or break your return on investment. When renting to students there are a number of factors to consider, chief among them, proximity to the campus and other school amenities.
Additional factors like the neighborhood’s crime rate, property value fluctuations (have they gone up or down) and the rental rate that other properties in the neighborhood are going for, should all be considered.
Of course, buying a rental property closer to campus may mean a higher price up front, which could in term mean charging more rent, which lead to more responsible tenants.
The rental website, HotPads has just released data that may shed some light on some of the most affordable and unaffordable neighborhoods for students and recent college graduates near campuses. Here is a look at a few. AtlantaEmory University located in North Druid Hills Estimated per-person rent in nearby neighborhoods:
- North Druid Hill: $856
- North Decatur: $533
- Morningside/Lenox Park: $697
SeattleUniversity of Washington located in the University District Estimated per-person rent in nearby neighborhoods:
- University District: $983
- Montlake: $868
- Wallingford: $1,100
Boston MIT located in Cambridge Estimated per-person rent in nearby neighborhoods:
- Cambridge: $1,283
- Back Bay: $2,600
- Allston: $988
Once you’ve settled on the location of the a potential rental property, it’s time to look at costs.
Will your monthly mortgage be covered by the rent you can charge? And, are there any added expenses you need to factor into get the property move-in ready?
By taking all of these things into consideration, you may find that the investment property is the way to go. Or those on-campus housing costs may start looking far more affordable. Kristy
Hessman writes for HotPads, a rental search website that makes it easy for you to find your next place in the city. Photo by: Flickr