Buying Real Estate In A College Town

Oh hey – look, there’s a blog under all this dust.  It’s been a while – lots of stuff happening in the New River Valley real estate market lately, so apologies for being gone.  Absence makes the heart grow fonder?

The Internet is a big, big place, and it’s impossible to read it all.  So I love it when readers send in links they find that are of interest.  In this case, Stuart Mease emailed me and said “you need to post this.”  So I did it – I follow instructions.

Reuters recently mentioned that many parents are buying real estate in college towns.  The article says that parents are still buying properties as investments in college towns, and I’d say that’s still happening here in Blacksburg and Radford, as well.  Certainly, it hasn’t happened at the same pace as it has in years past, but they’re still a popular choice among parents looking for an alternative to rent, or for investors looking to take advantage of the constant turnover a college town brings.  But it’s not for everyone – if you don’t expect to own the home for more than three years, I would caution you to run the numbers with your real estate agent very, very carefully.  Not every property will produce cash flow, and if your time frame is less than three years than you need to decide if the purchase is for investment purposes or for convenience. Besides parents buying up properties in college towns for investments we are also seeing quite a few we pay cash, we buy houses company‘s buying up college town properties and renovating them and then selling for a fairly large profit.

The article notes:

  • room and board rates have increased more than 4% – Virginia Tech and Radford rates can be found here
  • the average cost for a four bedroom, two bath property in a college town is less than $250000

Average sales in Blacksburg and RadfordTo compare, I took a quick look at the average cost for four bedroom, two bath properties in both Blacksburg and Radford over the last few years, and the numbers line up with what’s reported in the article.  In Blacksburg the average price is $254000 in 2010, while in Radford it’s $156000.  Pretty close to what’s reported in the article.

Interested in investing in the Virginia Tech, or Radford University, markets?  Let’s talk – we can run a couple of different scenarios and see how the numbers bear out, whether for single or multiple properties – even apartment complexes.

3 thoughts on “Buying Real Estate In A College Town

  1. Franklin

    Jeremy, I do admit, I wished I had bought property here 15 years ago 😉 IT definitely IS a good thing for property owners and the reality of the matter is there would be nothing here without the Uni so…

  2. Anonymous

    I understand the sentiment, Franklin – in fact, I was telling someone yesterday that if I were moving in to the area today, rather than when I did nearly 10 years ago, I likely wouldn’t be able to purchase a home in Blacksburg, all things being equal. There’s certainly a difference between what $250000 in Blacksburg will buy versus other areas of the New River Valley … but while there are certainly negatives that come from having universities in your backyard, I’ve also heard very good arguments for them, as well. It’s a balance (see: Blacksburg High School reconstruction).

    I guess the point I was trying to make was that investing in college communities CAN be a good thing, with some caveats.

  3. Franklin

    IT actually sucks for the locals here because the typical jobs, and I mean good jobs in IT, engineering, etc… do not pay enough for us to live in the Town we work in so many of us are forced out into the county or Christiansburg. It’s easy for rich NOVA parents to come to Blacksburgg and buy up property at a fraction of the cost of what it would be in Fairfax as a place to stay for there kids or to entertain guests… yay football.

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