For landlords, owning property in college towns denotes stable rental returns, regardless of the state of the economy. Colleges provide a steady source of high quality, high paying jobs for the local economy. Recently, a large number of the unemployed have also gone back to school, increasing demand for student housing.

Accompanying this increase in demand is a national increase in rents caused by the financial crisis. Over the past 12 months, rents have risen nationally by about 5%, per Trulia, and are anticipated to continue climbing. Part of the larger demand for rental housing, rental prices in college towns are also expected to rise.

With home prices remaining low and rents continuing to increase, now is the time for buyers looking to invest in college towns. Coldwell Banker’s College Home Listing Report for 2011 indicates that the average three-bedroom, two-bathroom home sold for less than $200,000 in two-thirds of the college markets, and less than $150,000 in a quarter of college towns. A final tip: the closer to campus the better.

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California college students are a demographic in need of housing, but with the up-and-coming Generation Z (Gen Z) being less than half the size of today’s college aged Generation Y (Gen Y), student housing will provide only short-term relief for property owners and managers.

As the recovery gets fully underway, going into 2016, the demand for rentals in college towns will drop since nearly all students leave the area on graduation. Also, Gen Y will have passed their peak college age years, moving on to jobs in the cities and homeownership, and post graduate work will end with the recovery, all reducing the number of students on campus and in rental properties.

Of course, the usual additional student conditions remain: annual rent paid in full during the school term and guarantees by parents.

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As Gen Y is more likely to rely on the internet to obtain the information they want, agents and brokers must turn to social networking services to better connect with this demographic. By building an internet presence on Craigslist and Facebook, students will be able to research your local listings for rental properties alongside their networking for roommates. Make sure your rental properties are listed there!

Related article:
Social networking has proven valuable to agents

Re: Real estate investors’ best kept secrets: College towns