Investor · Frisco, TX · Member since 2017 · 41 posts · 26 votes
What's going on everybody!
I have been researching and reading to conclude the best emerging markets in Texas and am wondering if a city where the jobs are not as diverse because of the colleges, is a good investment market. I understand that it would be harder to get a loan if the tenant percentage is over a certain amount, but putting that aside would it be a caluclated risk to invest in said city?
I feel like a college town would have a bigger market for renters than owners.
@Nick Love College towns can vary greatly. What works in one town may not be viable in the other. As a general rule if it's a thriving and growing school there will be demand for housing but it's a very different business model especially for undergrad vs grad students and year round. Most major university cities are great places to invest but it's a niche business.
@Nick Love College towns can vary greatly. What works in one town may not be viable in the other. As a general rule if it's a thriving and growing school there will be demand for housing but it's a very different business model especially for undergrad vs grad students and year round. Most major university cities are great places to invest but it's a niche business.
I think College towns generally are great towns for investment.
The issue I seeing in College Station is all the Big Players see that as well. They are putting up large Resort Style places with pools, volleyball, BBQ areas, etc, etc. And they are attracting all the well-to-do Moms & Dads that want their child to have all the amenities of home.
The small players are struggling to maintain rents unless you are extremely close to campus.
It's a different style of management, but it can be very lucrative. It's a little higher touch with higher turnover in what I have seen.
I would recommend reaching out to investors who have worked specifically in these markets. It's not hard. I would just search for investors based in small>>medium towns with large universities. If they own more than a few units, they can give you the reasons to do it, or not.
Nick, are you open to considering SFH in addition to apartments? I've done both and much prefer the SFH. As for tenants, I love renting to college students, in fact, I prefer them over working people with jobs. Students, at least in my area, tend to be a higher class of people and just much easier to deal with . Many of them have financial backing or some help from parents, so collecting rent is rarely a problem. Most of my student tenants stay at least two years, but if they only stay a year, it's easy to rent to another group of students. Graduate students make great tenants, too. More mature, responsible, and some stay four to five years. If I was starting out, I would focus exclusively on renting to college students and avoid all the grief I went through with Sec. 8 and marginal tenants with crappy jobs. Also, I've found many students prefer living with other students in a SFH instead of big, impersonal apartments. Finally, all my leases are for an entire year. If the custom in your area is for only nine month leases, leaving you to scramble for short term tenants during the summer, it will be harder.