Why Should You Buy Investment Real Estate In College Towns?
Now seems to be the best time to invest in properties in college towns where housing demand is high due to a soaring rental market according to the New rules of real estate by Business 2.0 Magazine. With home prices still out of home buyer's range, and homeowners selling their homes due to rising interest rates, rents are expected to increase nationwide. This makes buying investment property in rental markets such as college towns an attractive option, one that is already being pursued by investors. Rents are expected to rise by 5 % by the end of this year according to the National Association of Realtors (NAR), and investors are looking at college towns with increased interest.
There are two major reasons why it is prudent to buy investment property in college towns now. When compared with other rental markets, the rentals in apartment buildings in college towns are much stronger and hence more profitable. This has been augmented by the fact that apartment buildings in college towns are fewer in number. This demand for apartment buildings has also increased due to the rising admissions in colleges mostly from the Gen Y or the echo boomers, which has further increased the asking rates in the college town rental markets. These properties have a low vacancy rate, especially in buildings located near the campuses. Investors in commercial apartment buildings also get to increase their rent with the mounting demand making such investment a highly profitable venture.
So if you are a prospective landlord who has decided to encash this favorable situation, then you can start with choosing the college town that has the lowest ratio of university-owned beds to the student population. As Michael Zaransky, co-founder of Prime Property Investors in Chicago says, prospective investors would do well to pick the college towns that have the ratio of university-owned beds to students at 30 % or lower. One should also look into colleges that propose to expand their student ranks by 2 or 3 % every year.
Investors should also need to take into consideration the disadvantages involved in owning commercial apartment buildings in college towns. The business could be trying sometimes, and involves risks with college policies liable to changes and the difficulty involved in predicting volatile student demand. However, considering the high rate of returns that the investment has to offer, the pros seem to far outnumber the cons making buying investment property in college towns a smart option.
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This Nashville property was purchased for $115000 in a "young professional" section of Sylvan Park. We renovated it for about $25000, and sold it for $225000. Properties with this kind of profit potential can be found anywhere around the country. www.CashinHouses.com is a site for real estate rehab investors. For 25 years I have helped investors buy WITHOUT CASH OR CREDIT, just like I did in amassing a multi-million dollar net worth in only 3 years. I have been sharing the techniques I ...
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Where can I get real estate investing info?I'm extremely interested in real estate investment and would like to find a website with info I can read to learn how best to invest in buy to rent properties. I have a plan, I just need to learn how to do it. I know investopedia has all kinds of information to teach people how investing works, I'm just curious if there is one dedicated to real estate investing.
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June 25th, 2009 - 17:39
Nice Vid. I enjoyed it. We market properties and other things on youtube, we hope to create a large network of people interested in making money. Your video gets a five star rating from us. I hope you feel the same about ours.
June 25th, 2009 - 17:42
When I started, “lack of finances” was the reason but I’m glad I started wholesaling houses first because this biz can hand your hat to you really fast if you don’t know what you’re doing when it comes to retailing and rentals.
Wholesaling will allow you to make money and learn at the same time. It’s a low risk biz to start making money and you’re in the BLACK on your first deal.
June 25th, 2009 - 18:31
Got a home in contract in indiana. House needs about 5K in repair (if that) Market Value 58K, need investor will sell for 18K – 25% Good faith -
June 25th, 2009 - 17:29
NO they are all scams – enlist the services of a realtor or real estate attorney and find a really smart mortgage broker who is a member of the National Association of Mortgage Brokers. Several of those "get rich quick investing programs" are under investigation by the states and federal Attorney generals offices-
http://www.FTC.gov
June 25th, 2009 - 18:55
Have you heard of Robert Kiyosaki, who wrote a book called Rich Dad, Poor Dad? check out one of his books @ the library, read it, and then go signup up for RichDadWorld.com – there is free information there on how to start. Best of luck to you.
June 26th, 2009 - 03:03
since each state has different laws and taxes, you did not say where.
i bought some apartments in pennsylvania years ago, very good return
and the write off each year is amazing. thing is, i have them very close to where i live so i can keep an eye on the maintenance and upkeep. i'm not a slum lord nor do i want to be.
i had a rental house in florida, but it was too much of a pain. when it was rented it was profitable but you need to count on Realtors to rent it and they never keep an eye on it after they get their 2 months.
no matter how bad the economy got, people still needed places to rent especially when they could not afford to buy. i am one of the few landlord that allow pets. sometimes that bites me in the butt, but in general people who would rather move than give up their pet, seem to be more responsible. my 6 apartments have been rented by the same people for the last 5 years…when i have a good tenant, i tend to lower their rent a few dollars, everyone is happy.
good luck…whatever you put your money in, keep an eye on it yourself.
June 26th, 2009 - 03:17
Your best bet are duplexes for rent or buying a house that needs a lot of cosmetic repairs. You just need to make sure you have enough money to pay the mortgage until it sells. The "real investors" purchase now and hold on until the market is high. Buy low, sell high pertains to real estate investor too. A real investor does not buy high and sell a little higher.
June 26th, 2009 - 20:46
Hi there,
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June 27th, 2009 - 05:26
Thank you for answering me. No, nothing new. Why flipping instead of making the whole deal yourself? Lack of finances?!
June 27th, 2009 - 08:17
Great, it’s a great way to make it easy to negotiate when you know what price you gotta have
June 27th, 2009 - 09:38
Man you really have a way of teaching and getting the point across in a clear way.
Thanks and keep up the good work!
June 27th, 2009 - 06:20
I think you should wait until you are able to be more aware of what is happening in that state you want to invest in. It's kind of like being blind to what's going on if you can't be there for a while. I think you should wait. The market will always have a favorable time again to buy if it changes.
June 27th, 2009 - 17:39
Why should you flip for, let’s say 5.000 when you can make 40.000 if the seller is “smart” enough to sell it for 45.000?!
This doesn’t make sense.
June 27th, 2009 - 11:48
Yes, you can, but if you have never owned real property previously, you need to learn a lot before you get started. You will be dealing with people who do this type of work day in and day out. You will be dealing with Mortgage companies, Title Companies, your County (taxes and deeds), as well as everyday people who might know more than you do. There are forms, contracts, not to mention home inspectors, etc …
If I were just starting out now in real estate, I would do these three things first -
1. Learn how things are done in your part of the world. This includes all of the paperwork involved.
2. Find out how much it really costs! Title companies charge more fees than just about any other business I have ever seen, but they are very good at what they do, you definitely get what you pay for. This is not the area to cut corners.
3. Make sure you don't overlook the best deals. When I started out, I worked the area within 10 miles of my home and missed out on a lot of opportunities. If I had been willing to do a little more driving, I probably could have had an easier time because I would not have been limiting myself geographically.
June 28th, 2009 - 00:01
It’s simply, for whatever reason the owner of a property views it as a problem instead of an asset.
Examples: Too many repairs, tired of being a landlord, live out of town, NEED QUICK MONEY, divorce, lost of job, medical bills, etc.
You’re the problem solver and that’s where you make money.
THIS IS NOTHING NEW
June 27th, 2009 - 20:15
cash flow, cash flow, cash flow, cash flow and cash flow.
People that get into investment real estate hear all the stories about NO MONEY DOWN. But the problem is, that you lose money every month. Rents are less then expenses.
My rule of thumb is that my PITI equals 50 percent (or less) of my gross monthly rent. The other 50% is NOT profit, but covers up keep and other expenses.
On all my properties I have a positive cash flow and a ROI of around 14% per year (before taxes and tax breaks).
June 28th, 2009 - 06:52
I have always been confused on the formula, now I think I got it. Thanks!
June 28th, 2009 - 03:07
Check out your local Real Estate investment Group ( http://www.reia.org/ )
or check out the Cashflow Clubs from Richdad.com
-Angela
http://www.ratraceclub.com
June 28th, 2009 - 08:57
Most government grants are in blighted areas where they want to spur rehabilitation of neighborhood properties. As far as I know there are no federal grants avalable unless you are revitalizing a property which will end up on the national register of historic properties, but these would have little to no profit potential due to the high cost of rehab to get the property to standards. The local programs generally only give 5-20k for help in rehabbing homes, but unfortunately come with so many strings attached that you will be begging them to take their money back just so you can get them out of your hair. Once you invite them in, you many times lose the grandfather clauses on any number of code requirements that have been put in place since the particular home was built and you have to spend as much if not more than the grant money to get the place up to the government standards that they require in exchange for the grant.
In my honest opinion, better to just get your own loan and go it alone….
June 29th, 2009 - 00:26
Thanks, i try