Do tenants care about the school district?

Question

All,

I'm working on my first home/rental purchase in NJ and I need some help. My plan is to buy a suitable single family rental property, live in it for 1-2 years and then move out and rent it. I currently am married without kids. I've identified a good opportunity, but am hesitant on account of the school district. The school district is Woodlynne NJ, on the lower end (5/10) on Zillows. Rents in the surrounding area are $800-1400 for 1 bedroom apartments, and $1000-1400 for a small old townhouse. I'd be renting the 1450 sqft single-family home for $1200. My question to all of you is: Does it matter? Do lower-income tenants care about the school district?

Thanks!

Kyle J. · Answer

I think most people with kids care about the school district.  Though it may not always be for the same reasons.

I can't speak for all tenants, but I can share some anecdotal evidence from my own experiences as a landlord.  With higher income tenants with kids, living in a good (or even the best) school district is often a top priority that they may be willing to pay more for because they want their children to have the best education.

With lower income tenants with kids, I'm sure they also want their kids to go to good schools, but that is not always the most important factor.  And they may not be financially able to pay more for better schools.  Depending on how low income they are, it may be more important to be at a certain school close to their home so the children can walk to school or utilize public transportation if they don't have their own car.

I've also had more than one lower-income applicant (who also later became my tenants) come to me after they saw the "for rent" sign in the front yard of my property.  They said they had been driving around the neighborhood looking for a place to rent because they already lived in the area and wanted to keep their kids in the same school.  It wasn't necessarily the best school, but it was important to them to not have to uproot their kids and transfer school districts.  (Side note: Those particular encounters also taught me that it's important to know how your prospective tenants shop for their next home in whatever market you're in.  I like advertising online and that is how I would shop for houses if I was a renter, but I realized that not all renters do that and some actually drive the neighborhood they want/need to live in.  So that's why I still use good old fashioned yard signs when I have a vacancy in some of my rentals.)

Nevertheless, I think in general it's often a good idea to buy in the best school district you can afford because it will open your property up to a wider variety of renters.  Afterall, pretty much anyone will live in a good school district, but not every one will want to live in a bad one.  Though, as my experiences have shown me, that's not to say that you won't be able to rent the ones in the bad school districts.  It may just be for different reasons and to different types of tenants.