Back to School: Where is the Best College Rental Market?

By E-Renter Tenant Screening
Posted on August 17, 2011 under Housing Trends, Rental Market | Be the First to Comment

Real estate investors have long been active in college towns for a number of reasons. Rentals are often short-term and dealing with younger students as tenants can be problematic, but when mom and dad co-sign the lease, they tend to pay the rent on time every month.

College enrollments are up, and on-campus housing is in short supply. Demand for rentals is high and vacancies low, so rents are generally healthy. All told, college students who need a place to live can be excellent prospective tenants—and rental property in a college town can be a great opportunity, if the terms and price are right for you.

Move.com recently published a list of the best university cities for real estate investment. Here’s how their ratings shook out:

City	Median List Price	Average Rent, 2BR	Average Rent, 3+BR
Boston	$335,000	$3,122	$3,913
Nashville	$189,000	$949	$1,020
Chicago	$199,900	$1,780	$2,074
Washington DC	$375,000	$3,086	$3,214
Houston	$174,900	$1,218	$1,478
South Bend, IN	$112,900	$790	$880
Atlanta	$159,600	$1,236	$1,485
Baltimore	$242,700	$1,443	$1,663
St. Louis, MO	$163,945	$1,016	$1,283
Syracuse, NY	$154,900	$838	$970

• Boston has over 50 colleges and list prices have dropped nearly 3% since last June. Rents are on the rise.
• Nashville’s average rents are higher than the average mortgage of $770.
• Chicago’s median list price is down over 16% since last June.
• Washington DC’s average mortgage for a median-priced home is around $1,530.
• Houston has low-priced inventory and some top-ranked colleges. Average mortgage is about $710.
• South Bend is home to Notre Dame and the average mortgage payment is around $990.
• Atlanta’s median list price is down 13.68% from last June, and lower than the national median.
• Baltimore is home to Johns Hopkins University, with median prices down 7.72% since last year.
• St. Louis, MO ‘s median list price is also lower than the national average, and mortgage payments average around $670.
• Syracuse is home to Syracuse University, as well as several other colleges. Median prices are down and the average mortgage payment is around $630.

College towns have a ready-made pool of renters, and generally, the rent money is not a problem. Manage the property correctly, and you could have a successful investment for years to come.