Real Estate Speculation in College Towns

If you are a tried and true real estate professional, you know that the speculation process is often the most important process. If you have investors, or if you are planning a larger development – either commercial or private – you need to make sure you cover all your bases. Indeed, knowing these bases is half the battle, especially in a college town. College towns are different than other real estate hot spots because they don’t fluctuate along the same market valuation lines. Demand, opportunity, and other factors are all different. Here are some factors to consider when real estate speculating in a college town.

Decide on What Type of Real Estate to Invest in

Before you start to put any money down, or source financing, you need to know what you are going to invest in. Will you be developing from scratch based on a parcel of land? Will it be a commercial strip or rental property? You want to have a good idea as to what you are offering to a college community before you invest. If you don’t know what you will be offering, college real estate investing and speculation will be a big challenge, and it will be hard to raise money.

Gauge the Opportunities and the Demand

Once you know what you want to build, you can hold it up against the demand in the community. If there is no true main street – with a core group of shops – you probably want to go to the commercial real estate route. If there is a lack of student housing, you probably want to go in that direction. The truth of the matter is that if you don’t know the demand, your investment won’t be as prosperous. However, if you know exactly what a community wants, you will be much more successful.

Measure All the Risks

Of course, when you are gauging the demand for a property, you also want to measure the risks. The big benefit of investing in real estate in a college town is that there are minimal risks. However, whether you are building near the University of Akron or Vermont Law Online, there will be risks – you just need to find out what they are so that you can minimize them. Minimization of risk should happen before the financing phase.

Create a Grid

Once you have your groundwork laid out, you can start to create a grid. A grid will help you know if you want to build closer to the campus or further away. You may find that there is a gap in the real estate market closer to campus. This may allow students to live within blocks from the school. In other cases, you may find something a little more off the beaten path.

Research the Tax Laws and Breaks

On top of everything, you want to research some of the tax laws and breaks you can get from investing in real estate in a college town. You may be able to get even more breaks if you offer to the house to low-income students.