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Why Investing in College Town Real Estate Just Makes Sense

on December 19, 2016     by Jeff Lottmann

Owning the property your child lives in while he or she attends college can be beneficial in several ways. First, there are the financial benefits—you aren’t throwing away money on rent. Secondly, there are significant peace of mind benefits—when it is your property, you know that your student has a secure home with proper amenities. Whether you have one child in need of a college home or several children who will attend the same college over the next decade, consider the following reasons why investing in a property might just make sense for you.

  • Stability & Safety. Finding a new place to live each year can be stressful—especially at the end of the semester when your student should be focused on studying for finals. With an investment property that they can live in year after year, your student won’t have that burden. Plus, having a single place to live in that you own means they will not have to worry about storing furniture over the summer break. In addition, you can pick the lifestyle that will help your child succeed in school by choosing the location and the quality of housing that best fits their needs. For example, if they need a quiet study area, you may want to avoid a property next to a fraternity house. If safety is a concern, you can choose a well-lit area with ample parking near the home.
  • Savings. Rental prices typically increase on an annual basis. By purchasing a property with a fixed rate mortgage, your housing expense will be consistent. If your student has roommates, you can collect enough rent to cover the mortgage—and potentially make a profit—each month. Other financial benefits include possible appreciation in value, possible tax benefits, and debt reduction on an amortized loan which increases equity build-up. Rather than throwing money down the rent drain, you’ll build equity in a real estate investment over the period of time your children are in college.
  • Future Passive Income. The demand for rentals is high in college towns. You will have a large pool of prospective tenants to choose from each year as students enter college or move out of the dorms and need to find a place to call home. This demand can also help keep rental prices in the area strong, even when other parts of the housing market are failing. In addition, housing is often paid for by the student’s parents, or even by the college itself, so you may be able to get a higher rental price for the property. Not to mention the opportunity to rent the property out on sites like Airbnb during major events. I know many alumni, for example, who are willing to pay big bucks to stay close to certain campuses during Homecoming weekends.

If you think investing in real estate for your college student might be a good decision for your family, or are interested in learning more, Lottmann Realty Group is here to help. We have decades of experience investing in properties in college towns and can help you facilitate the loan process with our trusted preferred lenders. Whether your child attends college in Missouri, or in any other state, we have the partnerships to make it happen.

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Jeff Lottmann
A natural born salesman, Jeff has always had a passion for real estate. After seeing success as an investor, he decided it was time to make his passion his career. So, in 2002, Lottmann Realty Group was born. Because his business and practical experience differentiate him from his competition, Jeff is the “go-to” real estate agent for hundreds of families and real estate investors throughout the course of their lives.