Do Schools Really Affect Property Values?

Do Schools Really Affect Property Values?

2 min read
Ken Corsini

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 houses in Metro Atlanta since 2005.

With over 15 years of experience in the real estate industry, Ken has expanded his original flipping business into multiple independent real estate businesses, including Red Barn Real Estate, with over 180 agents in Metro Atlanta across four offices; Red Barn Construction, a custom home-building company specializing in modern farmhouses across North Atlanta; Red Barn Renovations, a full-service renovation company; Black Oak Mortgage, a direct lending company based in Woodstock, Georgia; and InvestorSumo, a technology company focusing on CRM and data needs for real estate investors.

Having been involved in thousands of transactions and having owned over 800 houses, multiple commercial and multifamily properties, and more, Ken brings a wealth of knowledge and experience to the BiggerPockets community. He has authored over 100 blogs and currently hosts the “Best Deal Ever Show” on the BiggerPockets YouTube channel. He is also the host of the popular Deal Farm Podcast.

Ken is currently writing a book in conjunction with BiggerPockets called “Profit Like the Pros,” scheduled for release in Fall 2020.

He and his wife also run Roc.Star Kids, a non-profit organization focused on the needs of children and families in the fight against childhood cancer. For more information on this very personal cause, check out their story here.

In addition to HGTV and HGTV Magazine, Ken has been featured on The Today Show, People Magazine, The LA Times, Think Realty Magazine (cover), TV Insider, In Touch Weekly, Life and Style Magazine, The Wrap, The Atlanta Journal Constitution, UGA Today, US Chamber of Commerce, PopSugar, Entertainment Magazine, and a number of local periodicals.

Ken has a Business Degree from the University of Georgia and a Masters Degree in Building Construction from Georgia Tech.

Ken is currently licensed as a general contractor (commercial) in the state of Georgia.

Instagram @kencorsini
Twitter @kencorsini

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In 2009 as I worked to complete my masters degree from Georgia Tech, I undertook a large research project to study the effects of the recession on housing values in Metro Atlanta. The purpose of the research was to identify changes in the demand for certain characteristics of residential properties as the market was falling. Essentially, we were interested in identifying changes in what buyers valued in a residential property in 2009 versus 2006.

In conducting the research we targeted Cobb County, a suburban county about 20 minutes northwest of downtown Atlanta. We looked at approximately 150 home sales from August 2006 and 150 home sales from August 2009. Using statistical analysis, we analyzed characteristics such as bedrooms, bathrooms, square footage, age, stories, garage, basement, general interior and exterior, school district, crime stats, median income, etc.  One of the most interesting takeaways from this research was the profound effect that a quality school district can have on the housing values in the surrounding community.

Quality Schools Do Affect Property Values

In our research, we used the website which uses a 5-star rating system based on a number of different factors including enrollment, student/teacher ratios and test scores.  What we found was that properties near schools with a rating of 4 or 5 stars were almost completely insulated from declining values while those near schools with 1-3 stars experienced massive losses in value over that 3 year period.

As a full-time real estate investor, this information has dramatically affected my buying criteria.  While I am fully aware that there are many, many other factors to consider when buying an investment property, school districts have become much more important in my decision making.

For example, I was looking at a HUD home last week in Marietta, GA (Cobb County) as a possible long-term investment. It was a nice split level home built in 1980, located in a stable neighborhood with good comparable sales, but there was nothing particularly special about the house itself. Truthfully, if this house had been located in another Metro Atlanta area hit harder by foreclosures, I probably wouldn’t have bothered to look at it.  Or if I had considered the house in a less attractive area, I would have expected to pay at least $25,000 less than what I was prepared to bid on this property. In reality I was okay paying a slight premium for the property because of the location in a 4-star school district with strong comparable sales. Fully realizing that I would probably sacrifice some level of monthly cash flow in the short term, I concluded that the stability of real estate values in this area would make for a better long term investment.

Unfortunately, another investor thought this was a good buy as well and ended up bidding higher than I was willing to pay.  This perhaps serves as a great reminder that regardless of how good an area (or school district) is, the numbers still have to make sense.

Bottom line?  Yes, schools are an important consideration in the purchase of a property; however, several key factors need serious thought before placing that final bid.

Photo: Kamoteus (A Better Way)