The existence of a college has various advantages to the surrounding community. One of these advantages is that individuals can invest in real estate and other businesses around colleges. Investing in real estate here can be in various forms depending on the entrepreneur.
The most common and recognized one is renting out property. Renting out can range from renting out a room to having a whole building to rent out to students who prefer living off-campus. Like all other business ventures, there is significant risk involved.
However, there are also some great facts supporting real estate investment around colleges and universities. Various benefits stem from investing in property in such areas, and we have identified the 5 major ones.
For landlords, one of the major hurdles one has to face is attracting prospective clients. Building a reliable client base is often a challenge in most areas. However, when you have a property to rent out near a university, the clients tend to bring themselves.
Colleges can’t house all their students on-campus. Furthermore, many students will consciously make the decision to live off-campus, where they have a little more freedom. It is estimated that in public colleges, 40% of the student base lives on campus, the other 40% live off-campus, and the remaining 20% live with their parents.
Taking into consideration that most public colleges enroll at least 20,000 students annually, it’s safe to say that the numbers are in an investor’s favor. So, there will already be a strong client base for landlords with property around colleges. Furthermore, when tenants move out, there will always be someone in the waitlist ready to replace them. There is a waitlist, especially if your facility is safe and with all the amenities required by students.
One of the issues that have the potential to cause problems is the reliability of the tenants when it comes to payments. However, when dealing with college students, it’s essential to realize that their parents still support a lot of these individuals.
Most off-campus students have their rents paid by their guardians. So, they are likely to be consistent and timely since no one would risk having their kids kicked out for late payment. The reliability of payments makes it easy to get the return on investment. Aside from students, teachers and other staff require housing too and will also choose to rent, specifically in the spaces closest to the campus.
Investing in real estate is great when there is the opportunity to reap the rewards in the long term. The education system provides the kind of long term supply of customers that any business would need to flourish. Similar to a service where students buy essay online, there will always be new students annually in need of housing services.
Students who rent off-campus usually do so for the long term. Many students stick to the same location until they are done with college and then move out. Some of the new college students will then fill the vacancy. It creates a cycle that will be there in the long term unless the institution shuts down.
Renting out houses is one of the businesses that are immune to inflation. Even during tough times, education is not often affected. It means that students will still need accommodation. So, they will still have to pay for their housing or risk losing their rented spaces.
Furthermore, there is a lot of demand for rental spaces that are strategically placed, especially those closest to the school. These will always have a waitlist of students ready to replace others when a vacant space opens up.
Educational institutions help in raising the value of nearby properties. Having a college encourages other renters to place businesses and other strategic amenities at students’ reach. It, in turn, stabilizes the value of property in the surroundings over the long term.
Being assured of a stable property value is excellent news for investors. It means that even when an investor decides to sell in the future, they will return their original investment. Sometimes they will even sell at a profit depending on the rise of property values.
Investing in real estate around colleges also comes with its responsibilities. There will often be maintenance costs that the tenant incurs annually, considering that some college students are not careful. It will also require you to choose an appropriate location that provides the convenience that students will be willing to pay for.