{"id":169844,"date":"2024-03-27T15:11:44","date_gmt":"2024-03-27T21:11:44","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=169844"},"modified":"2024-03-27T15:16:53","modified_gmt":"2024-03-27T21:16:53","slug":"best-college-housing-markets-for-cash-flow","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/best-college-housing-markets-for-cash-flow","title":{"rendered":"Market Madness: 10 College Markets That Are Great for Cash Flow"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">With the college sports season&#8217;s thrilling climax, this is also an exciting time for real estate investors who own rentals in college towns that are being given a high profile. These landlords have likely long known that&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/investing-student-housing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">student rentals<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;are one of the most lucrative places to make ongoing high yields.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Having the national spotlight focus on a college town where you invest is like having huge ads placed outside your property to attract future tenants. Colleges in the South and Midwest generally mirror real estate in those areas, which have provided some of the strongest&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/cap-rate-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cap rates<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for investors in recent years.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Here&#8217;s a closer look at the towns and cities where great sports teams pair with great investments. We ranked the college towns based on their rent-to-price (RTP) ratio. An RTP is calculated by dividing the gross monthly rent by the purchase price (or, in subsequent years, by the market value). A standard RTP that investors use is around 1%, often called the 1% rule, although an RTP above 0.6% is also considered good. Thus, if a property rents for $2,000\/month and has a market value of $2,000, the RTP would be $2,000\/$200,000, which is 1%.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s important to note that every market will have its fair share of ZIP codes with high and low RTPs. There&#8217;s cash flow to be made in every market\u2014you just need to find it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Rent-to-Price Ratio of Each College Market<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">1.<\/span><strong><span data-preserver-spaces=\"true\">&nbsp;The University of Alabama<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(Tuscaloosa, Alabama): 0.76%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">2.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">University of Dayton&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">(Dayton, Ohio): 0.67%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">3.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">Texas Tech<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(Lubbock, Texas): 0.66%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">4.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">Northwestern<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(Chicago): 0.64%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">5.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">University of South Carolina<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(Columbia, South Carolina): 0.64%&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">6.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">Indiana State&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">(Terre Haute, Indiana): 0.63%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">7.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">Texas A&amp;M<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(College Station, Texas): 0.63%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">8.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">Mississippi State&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">(Starkville, Mississippi): 0.62%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">9.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">University of Illinois<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(Champaign, Illinois): 0.62%<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">10.&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">High Point University<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;(Greensboro, North Carolina): 0.60%<\/span><\/p>\n\n\n<p><iframe title=\"10 College Markets With Strong Cash Flow\" aria-label=\"Table\" id=\"datawrapper-chart-0H65l\" src=\"https:\/\/datawrapper.dwcdn.net\/0H65l\/3\/\" scrolling=\"no\" frameborder=\"0\" style=\"width: 0; min-width: 100% !important; border: none;\" height=\"451\" data-external=\"1\"><\/iframe><script type=\"text\/javascript\">!function(){\"use strict\";window.addEventListener(\"message\",(function(a){if(void 0!==a.data[\"datawrapper-height\"]){var e=document.querySelectorAll(\"iframe\");for(var t in a.data[\"datawrapper-height\"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data[\"datawrapper-height\"][t]+\"px\";e[r].style.height=i}}}))}();\n<\/script><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">A Closer Look at the Top College Towns<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Tuscaloosa, Alabama<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The University of Alabama is a big draw for real estate investors. However, the Alabama Crimson Tide isn't the only reason to invest here.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Like other more northerly Alabama cities of Birmingham and Huntsville, Tuscaloosa County ticks the boxes for good investment criteria. It has low unemployment (2%), a population growing by 2% each year, a decent median income of $58,620, and a generally affordable median rent of $1,549 with a robust rental growth of 7%, which means investors can increase their&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rental-property-cash-flow-analysis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cash flow<\/span><\/a><span data-preserver-spaces=\"true\"> each year. With a median home price of $205,030 and year-over-year price growth of 2%, Tuscaloosa is affordable, stable, and profitable.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">According to the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/tcoeda.com\/business-advantages\/major-employers\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Tuscaloosa County Economic Development Authority<\/span><\/a><span data-preserver-spaces=\"true\">, the main employers in the small city of 266,638 are the University of Alabama (6,839), Mercedes-Benz (4,500), and the DCH Regional Medical Center (3,444). Each long-established company is a stable source of employment.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Dayton, Ohio<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Known as the birthplace of aviation, Dayton, Ohio's real estate business takes flight thanks to its affordable median home price of $185,000, its 3% annual appreciation, reasonably affordable rent of $1,234, and main employer, the Wright-Patterson Air Force Base, with its workforce of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.dayton.com\/business\/employment\/top-employers-the-dayton-area\/58X4L6ox8z15TNIiRpgWZI\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">30,000 people<\/span><\/a><span data-preserver-spaces=\"true\">. Other big employers in the area are Premier Health Partners (14,135) and Kettering Health Network (5,029). However, it ranks just below Tuscaloosa due to its 3% unemployment and stagnant population growth.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Lubbock, Texas<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The 11th largest city in Texas, Lubbock enjoyed a stellar ranking in a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/blog.hireahelper.com\/top-college-towns-for-real-estate-investment-potential-a-2023-data-study\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2023 survey<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of 500 college towns for Best Real Estate Investment Potential. That survey was echoed in BiggerPockets data, with a low 3% unemployment rate, a modest population increase (1%), a healthy median income of $59,228, an affordable median rent of $1,342, and an annual rent growth of 1%. Homes are also affordable, with a median price of $202,763, though price growth is stagnant.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Texas Tech is the biggest employer in the city. Various other employers contribute to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/businessintexas.com\/texas-regions\/west-texas\/lubbock\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">diverse business<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;infrastructure in manufacturing, agriculture, wholesale retail, and healthcare, including Covenant Health, United Supermarkets, Convergys, and Tyco Fire Protection Products.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, Lubbock is more than a place to invest in real estate, which could be part of its charm. It was ranked No. 8 in 2022 for U.S. cities with the best work-life balance, No. 1 in 2023 for the best cities overall for recent college graduates, No. 6 (2022) for the best mid-size city business climate, and No. 10 (2022) for the best city for raising families.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Chicago, Illinois<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Located 40 minutes outside Chicago in Evanston, Northwestern both benefits and suffers from being located in the metro area of a major city. Unemployment is at 4%. However, home appreciation is at 6%.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">For investors, it's interesting to note that the median income is $82,914, yet the median cost of a home is around $300,000\u2014generally affordable by today's standards. However, as major corporations&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cbsnews.com\/chicago\/news\/billionaire-ken-griffin-moving-chicago-based-hedge-fund-citadel-to-miami\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">move out of big Northeast cities<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to warmer states and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/the-real-world-impacts-on-remote-work-and-what-it-did-for-investors\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">remote work<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;takes hold, Chicago has felt the hit with a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.forbes.com\/sites\/jackkelly\/2022\/10\/06\/moving-offices-from-big-cities-to-the-suburbs-may-be-the-future-of-work\/?sh=3b8a6c6e312e\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">few big defectors<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The Windy City has as experienced a small (-1%) population loss over the past year. Still, with established universities,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.builtinchicago.org\/articles\/largest-companies-in-chicago-tech\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">hospitals, finance sectors, new tech businesses,<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and other attractions and businesses of a major city, along with relatively modest real estate prices compared to other major cities, Chicago remains a worthwhile real estate investment.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Successful college sports teams often come from successful universities, well embedded into the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/view\/articles\/2018-03-06\/how-universities-make-cities-great?embedded-checkout=true\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">economic fabric of the vibrant city<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in which they reside, so it should come as no surprise that many of these cities also make for good real estate investments. It's unsurprising to learn that many&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2019\/05\/22\/how-self-made-millionaire-real-estate-ceo-bought-first-home-at-19.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">successful real estate<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;investors started their journey as students, renting out rooms in a home they owned and building their empires from there. Whether you are an investor or want to kick-start your kids' investing career, looking at cities with a successful college sports team will steer you in the right direction.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_c677528390970c9f221b65c239a9e6dc\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_2c6204e3cd3691954c792a2ef08808b2\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<div id=button-custom-event-block_25dacc196f54be426a2b0d5cdab82595 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Lender Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/best-college-housing-markets-for-cash-flow&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/best-college-housing-markets-for-cash-flow&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>With the college sports season&#8217;s thrilling climax, this is also an exciting time for real estate investors who own rentals in college towns that are being given a high profile. [&hellip;]<\/p>\n","protected":false},"author":613725,"featured_media":169842,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7364],"tags":[],"class_list":["post-169844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-markets"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/169844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=169844"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/169844\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/169842"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=169844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=169844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=169844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}