Thursday, April 19, 2012

Investors Eye College Towns for Best Deals

Investors are viewing college towns as offering big opportunities in purchasing homes at bargain prices and finding stable rental returns, regardless of any ups and downs in the economy, CNNMoney reports.

Nearly two-thirds of college markets in a recent survey had average three-bedroom, two-bath homes selling for below $200,000, according to Coldwell Banker’s College Home Listing Report for 2011. In nearly a quarter of college towns, homes sold for less than $150,000.

Mixed with that, rents have been on the rise nationally, rising 5 percent over the last year and projected to rise another 5 percent over the next year.

Investor Sally Linder has found her college-town rentals profitable. She and her husband own 13 single-family homes near Ohio University in Athens, Ohio. Their latest purchase was for a two-bedroom home for less than $90,000. They are then able to charge about $350 to $600 to rent each bedroom, which she says makes their investments profitable from day one.

In a study conducted by the state of Ohio about the recession’s impact on the housing market, researchers found that homes sold in college towns sold in the state experienced the smallest price declines compared to other homes, except for homes in high-income suburban towns.

Source: “Real Estate Investors’ Best Kept Secret: College Towns,” CNNMoney (April 2012)

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