Housing prices and mortgage rates have fallen, while college enrollment is rising as people go back to school in the wake of job losses. That has led to a scarcity of student housing, which means it’s a great time for real estate in college towns. For a landlord, it makes sense to seek college towns where prices are especially low to generate even more business from college students.

Tenants turn over annually, and today’s students may not suffer slumlords gladly. The economic downturn has made students — and their parents — a little more careful about where they will spend their money. They are willing to pay rents well above market value, if it is in reasonable distance of the university. This means that the bigger the apartment, the more income you will bring in, and that doesn’t include summer housing.

Be sure to keep in mind that students are tougher on apartments than the average tenant, so prospective landlords need to take extra care to protect their property legally. Make sure you get the proper insurance and tighten your property rules. Some measures to added to the rules are “no trespassing on the roof”, “flames of any kind (candles, fireworks, etc.) are not allowed”, “charcoal grills are prohibited”, “gas grills must comply with fire codes”, and “weapons of any kind (ex. revolvers, paintball guns), are not to be displayed on the property.”

One more thing to keep in mind is credit score. Students can be harder to vet financially because students often do not have credit to check. However, you can check with the school to ask about housing behaviors, like if they have ever been kicked out of the dorms or if they have been reprimanded for drugs.

While you need to go the extra mile when securing and managing a college-aged tenant, you can make a great profit. So do not rule out college real estate!

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