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CAMPBELL, CA-As parents across the country prepare to send their college-bound students to school this fall, many quickly find student housing can be a huge financial undertaking. So says a recent report from Realtor.com. Because of that, according to the site, some are now considering buying homes for their students to live in with classmates, while other potential investors are looking at college towns for rental properties that'll deliver a steady stream of student tenants and profits.
"I've had parents of students get frustrated with the huge price tag on some of the rentals here in the Boston area and they found that it made more sense to buy a condo for their child," says Willie Mandrell of At Home Real Estate in Boston, in a prepared statement. "Most recently I worked with a Boston University student and her parents purchased a two-bedroom condo in South Boston for her to live in while attending school."
Darla Jobkar of Northwood Realty Services adds, "Because we're home to almost 10 colleges and universities within a 10 mile radius of the Pittsburgh city boundaries, there has always been a shortage of housing for students. For this reason, college and university real estate investments in this area over the years have been a huge success to both long term and short term investors."
Realtor.com also recently released its second annual round-up of college towns to consider when investing in real estate. Selected from the top 25 schools featured in a recent national report, 10 markets were chosen based on today's average monthly rent prices compared to estimated mortgage payments of a median priced home in each city.
The list includes: Boston; Princeton, NJ; Chicago; Washington, DC; Houston; Philadelphia; Atlanta; Pittsburgh, PA; Providence, RI; and Los Angeles.
"In today's market, many real estate investors aren't necessarily the experienced short term investors of the past,” explains Errol Samuelson, president of Realtor.com. “In many cases, they're average consumers interested in planning for their financial futures and they look to real estate as a longer term investment option. Rental properties in college towns can be a great option for some investors since schools can present a steady stream of renters that need housing."
Tips for the Parent Landlord
Having a rental property can present challenges in many circumstances, so often investors hire management companies to deal with the day-to-day needs of renters, explains Realtor.com. “For parents whose tenants are their own child along with friends as roommates, setting up a business relationship can benefit both the parent and child. Tips include requiring the child and their friends to sign a lease agreement to guarantee a steady income each month while holding them accountable for condition of the property.”
According to Realtor.com, the lease should cover terms such as a designated day that rent is due, the security deposit and defines who pays utilities. “These terms will not only teach the students a valuable lesson, but will also protect the parent-landlord and child from a falling out among friends or other issues that can arise and jeopardize rental income.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
