Craig Hall, the founder of Hall Financial Group, often talks about how he started out investing in real estate in the late 1960s as a teen-aged college freshman at the University of Michigan by buying properties near campus that he rented out to fellow students.
It seems that Hall’s teen-ager investment strategy is still a very good one, even in the midst of the current real estate crisis and falling real estate values.
According to Business Week, property values in college towns are beating the trend and remain a good investment.
Looking at selected college towns with long-established, first-rate schools, a Business Week study found that 17 of 25 college towns outperformed their respective states in terms of home price appreciation last year; four towns performed as well, and only four towns underperformed.
The reasons are that college enrollments are increasing, college students believe that they need to live close to campus, and college domitories are not being built fast enough to keep up with the demand for student housing.
College students, partiularly at more prestigious (and more expensive) schools also tend to be more affluent than the general population, so they (or their parents) are more willing, and more able, to pay premium rents.
It may be time to send your money back to school — and buy that multi-family unit next to the Ivory Tower.