Rental Property Types 8 Reasons to Invest in College Town Properties by Hamza Abdul-Samad August 30, 2019August 30, 2019 by Hamza Abdul-Samad August 30, 2019August 30, 2019 One of the best features of real estate investing is the diversity of property types and rental strategies available. No investor has to be limited to long-term rentals. Airbnb rentals, commercial investment properties, and wholesale real estate are some of the most profitable types of real estate. Even within traditional investing comes a lot of variation in the types of income property. College town properties, for instance, are among the top forms of traditional long-term rentals. But why exactly should real estate investors consider buying a rental property in college towns? Here are 8 reasons to invest in college town properties! Related: A Guide to Choosing the Best Rental Property Strategy: Airbnb vs. Traditional 1. High Demand For many types of real estate, demand is nothing to take for granted. While this is also true for college town properties, demand is typically high when renting out to college students. About 60 percent of full-time students at public universities and 26 percent of students at private universities live off-campus. These students can find student housing in the form of rental properties in college towns. And the wide pool of tenants doesn’t just include students. Faculty, staff, and professors are also potential types of tenants when investing in college town real estate. 2. Consistent Occupancy Rates Demand is the theoretical aspect of renting out to tenants. Occupancy rates are the practical results. To piggyback off the previous reason, the high demand for college town investment properties leads to steady occupancy rates. Consistent occupancy rates of college town properties are arguably what make this type of rental property stand out. College properties function as long-term rentals for many students, with leases typically ranging from 6 months to 1 year. These long leases, coupled with the high demand and the wide pool of tenants, make college town properties some of the best properties for consistent occupancy. 3. Nearby Amenities Demand and occupancy are also influenced by the location of college rentals. One of the ways location affects college rentals is the presence of nearby amenities and attractions. Long-term rentals, of any kind, benefit from the proximity to amenities such as grocery stores and laundromats. The same applies to college town properties, with the addition of being near the college or university the student tenant attends. The best college towns are those that other tenants besides students flock to because of the culture-rich neighborhoods, bars, coffee shops, and restaurants. Properties in these locations will be in even higher demand and have better occupancy rates than the typical college town rental. 4. Profitable Rental Properties Of course, the main goal of owning a rental property is to generate profit in the forms of rental income and return on investment. Fortunately for real estate investors, profit is a staple of college town properties. As mentioned earlier, the high demand for college rentals leads to high occupancy rates. This results in high amounts of rental income, and eventually high amounts of return on investment. College rentals tend to be rented at higher rental rates than their traditional counterparts as well. To learn how to calculate the rental income for your college town properties or any income property, check out this guide: Real Estate Investing 101: How to Calculate Rental Income. 5. Reliable Rental Income Speaking of rental income, another reason why a college rental property is an excellent real estate investment opportunity is its guaranteed pay. As previously mentioned, college students tend to sign long-term leases, ranging from 6 months to 1 year, or sometimes longer. These leases are often covered by the student’s parents, particularly with undergraduate students. A student’s scholarship or student loans may even be used to pay rent. The result is assured payments from the student or parent, which is a feature every real estate investor would love to have. 6. Real Estate Appreciation Since college properties are rented out for the long term, a real estate investor can also benefit from appreciation. Appreciation is the increase in value of a rental property over time. These properties enjoy steady appreciation thanks to the fact that the college or university tends to support the local economy and attract business. A lot of college towns are even seen as the best places to live or retire, not just as places to get your education and bolt. With these characteristics comes high demand for real estate, increasing rental rates, and with time, property appreciation. 7. Lower Expectations There is a clear difference when using a property for student housing as opposed to a single-family residence. Students will most likely not care about the specifics of bed types, window frames, refrigerator brand, or other nitty-gritty details. Essentially, college students are mostly concerned with the presence of the essentials and some amenities and the proximity to the institution they are attending and other locations, like grocery stores or restaurants. Overall, college town properties have an advantage of being acceptable with lower expectations compared to other long-term rentals. This leads to less picky tenants and to saving costs when furnishing the investment property. 8. Profitable as Airbnb Rentals Lastly, being a landlord of a college town property is not limited to traditional renting. This aspect is very unique to college rentals, as many other traditional rental properties cannot be easily converted to an Airbnb rental. College properties can also be used as Airbnb rental properties to great success. Many colleges are part of a location’s success in tourism, particularly through university conferences and sporting events. These events garner high demand in these areas and thus require Airbnb rentals for visitors. Real estate investors should definitely consider using their college rentals as Airbnb rentals, as they are also in high demand and generate lucrative rental income and return on investment. Just be sure to check the local short-term rental regulations beforehand. Related: The Best College Towns for Buying a Short-Term Rental Investment Property The Bottom Line All in all, college town properties are some of the consistently excellent types of real estate properties. These properties are very lucrative for both rental income and appreciation. They are in constant demand and lead to high occupancy rates as a result. With lower expectations, assured pay, and the ability to also be used as Airbnb rentals, college town properties are unique among their traditional, long-term rental counterparts. To learn more tips about renting to college students, where to find the best college towns, and rental property management tips, visit Mashvisor’s blog! To start searching for a college town investment property for sale, click here. Start Your Investment Property Search! START FREE TRIAL AirbnbCollege TownsOccupancy RateTraditional 0 FacebookTwitterGoogle +PinterestLinkedin Hamza Abdul-Samad Hamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property. Previous Post 7 Things to Know Before Selling Your Home Next Post How to Analyze Real Estate Deals in 5 Steps Related Posts Understanding Multi Family Real Estate Investing from A to Z How Can you Choose the Best Real Estate Investment Types for You? Single Family Homes: How Much to Charge for Rent 5 Income Generating Real Estate Assets and How to Invest in Them Are Condos a Good Investment for 2021? Multi Family Real Estate Investing: Is This the Right Strategy for You? Which Real Estate Property Type Works Best as a Long Term Investment? Real Estate Market Trends: Living in Micro-Apartments Why Is a Single Family House the Best Investment Property? A Guide to Choosing the Best Rental Property Strategy: Airbnb vs Traditional A Beginner’s Guide to the 2020 Single Family Rental Market Invest in Condos or Single-Family Homes? Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.