College Town Real Estate is Still Hot

Real Estate investors should be looking for opportunities within this debacle.  Certain niches are still growing.

Source: Real Estate Journal 

The real-estate slowdown has forced some investors to change tactics. Gone are the days when an investor could buy a single-family home or condo, flip it, and walk away with a sizeable profit just weeks or months later without much effort.  But there’s one niche that continues to show promise for investors undaunted by the slumping housing market: college-town real estate.

This segment has recently caught the attention of large institutional investors like American Campus Communities, a publicly traded real-estate investment trust that earns 95% of its revenues from ownership of off-campus housing, according to Bill Bayless, chief executive officer of the Austin, Texas-based company. He and real-estate experts like Michael H. Zaransky, co-CEO of Prime Property Investors Ltd., a real-estate investment firm in North Brook, Ill., point to rising university enrollments and increasingly limited on-campus housing as two factors that make buying and renting out college-town housing an attractive investment.

While institutional investors like American Campus Communities — which builds large, multiple-unit housing projects for students in campus towns — compete with individual real-estate investors, there is still plenty of room for smaller property owners to profit, Mr. Bayless says.

“I think it is among the top real-estate niches for any real-estate investor to look into,” Mr. Zaransky says.  “It is not tied to general economic performance. It is tied solely to growth and enrollment in schools.”

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