If you’re looking to invest in real estate, you might want to shop around in a college town.
According to Coldwell Banker, towns that neighbor universities and colleges continue to be a hot spot for real estate investing, regardless of the economic downturn.
A new survey conducted by the real estate company found that 73% of realtors see a significant number of investors buying homes near campus and renting them to people in the community. Additionally, 64% see a significant number of “parent investors” buying homes for their kids to live in while attending the university.
“Our survey suggests two types of investors see value in college towns,” Jim Gillespie, Coldwell Banker’s chief executive officer said. More long-term investors are being drawn to college towns because they provide a steady stream of renters.
Parent investors, on the other hand, buy homes for their child to live in while attending college in lieu of paying for them to live in a college dormitory. Parents let their child live there for free while roommates provide rental income for the mortgage.
However, the motivation to invest in real estate near universities isn’t only financial.
“Towns that are home to major universities have a special vibe you just don’t find anywhere else,” Gillespie said. “College towns offer rich culture, and most have steady economic bases oftentimes highlighted by outstanding medical and research facilities.”
As such, the survey found that those buying real estate weren’t just long-term and parent investors. Of the survey respondents, 51% said they see a lot of alumni homebuyers, and 49% see a significant number of retirees moving to their college town as well.
Coldwell Banker Real Estate conducted an online survey of 425 real estate professionals who represent markets home to major college or universities. Next, to determine the most affordable college towns, Coldwell Banker Real Estate aggregated data from the listings in its database that were home to 120 Football Bowl Subdivision schools between April and Sept. 2010. Markets included in the report were required to have at least six properties fitting the above criteria within the relevant timeframe.
According the company, the most affordable college towns are as follows:
- Muncie, Ind. | Ball State University: $105,115
- Buffalo, N.Y. | University of Buffalo and The State University of New York: $117,223
- Memphis, Tenn. | University of Memphis: $135,090
- Columbia, S.C. | University of South Carolina: $137,707
- Akron, Ohio| University of Akron: $139,711
- Ypsilanti, Mich. | Eastern Michigan University: $141,629
- Athens, Ohio| Ohio University: $141,964
- Kent, Ohio| Kent State University: $153,662
- Toledo, Ohio| University of Toledo: $155,286
- Ruston, La. | Louisiana Tech University: $157,110
As a sidenote, parents with children looking to attend Stanford University should probably stick to on-campus housing. The University’s hometown of Palo Alto, Calif., ranked as the most expensive market with listings averaging $1,385,652.
Don’t want to live in a college town? Check out what housing markets are the most/least affordable in general in this MainStreet article!
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