The Best Time To Buy College Property
A year ago, Jeff Shea began buying up rental properties around the University of Illinois at Urbana-Champaign, from which he had only recently graduated with a business major. Shea, 23, who lives in Chicago, owns three rental homes near campus, including a four-bedroom house he bought for $138,000 and rents to four students for $1,800 a month.
“It’s the best time ever to buy houses,” Shea said. “The rent is inflated because so many people go to school here.”
Shea said he’d be happy if Champaign-Urbana prices took a dive so that he could buy even more. But college towns have remained relatively stable in this slumping real estate cycle. Students, university employees, and faculty keep apartments filled and form a steady stream of home buyers. And retirees and professionals flock to college towns because they’re attracted to the lifestyle and cultural activities.
Recession-Resistant Markets
Enrollments - especially at large public universities - are growing as more children of baby boomers (so-called echo boomers) graduate from high school.At cash-strapped public universities, dorm beds are limited and students are often forced to find private housing after freshman year, says Michael Zaransky, author of Profit by Investing in Student Housing (Kaplan Publishing 2006) and co-CEO of Northbrook (Ill.)-based Prime Property Investors, which invests in student housing.
“It’s a resilient market and seems to be fairly recession-proof,” Zaransky says.
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