college real estate : Why Not Invest?

2007-03-08 10:33:40

( Education )



If you are a student, the impression you have of college is all-night parties and crowded libraries; but for your parents it is simply a long list of expenses.

Good news for your parents. College doesn’t have to hit your wallet so hard – at least in terms of housing, which becomes increasingly more expensive as each year passes.

Room and board expenses can amount to several thousands per annum – and the figure increases every year. But there is an alternative. Invest in real estate. If you do so wisely, this could not only eliminate the cost of housing at college, but also turn a profit.

Rather than pour money down the drain on a small, uncomfortable dorm room or on an expensive apartment, you, the parent, can generate cash flow, build equity and in the long-term, benefit from real-estate appreciation. You just need to be prepared to invest some cash and become a landlord. College real estate is the way to go – and you don’t have to attend california real estate courses or texas real estate classes to appreciate the benefits.

college real estate, in the opinion of one broker / owner at a well-known real estate company, is a win-win situation if you have liquid assets. Instead of throwing away thousands of dollars each year, simply buy a 2-bedroomed condo for a few hundred thousand. You can charge four students a reasonable rental per month and still have a positive cash flow.

With a down payment and a reasonable mortgage length, your monthly mortgage payments would be less than what you net per month.

The good news about college real estate is that whereas general home prices fluctuate and flatten out, college housing markets experience less up’s and down’s. college real estate is significantly more stable compared to the general market. This is because university towns are well-established and have their own micro-economy within the greater city.

Often, despite economic difficulties in an area, values hold better in university towns. The university offers resiliency – making an excellent economic case for college real estate investment.

There are non-financial benefits as well. Students can, with their parents, learn first-hand about owning and managing property. They can learn real-world lessons like managing tenants, collecting rent and dealing with maintenance problems. And there’s the big plus of being able to choose your own room-mate.

Even if you aren’t a parent, you can invest in college real estate – the demand is consistent. University areas offer other cultural perks and a variety of diversity like sports, the arts and medicine.

But what college areas have most solid investment potential? Generally four-year colleges rate higher in terms of investment potential than two-year and highly-ranked institutions. Academic hotspots rate the highest on the list.


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