How Education Affects Property Prices
Smart real estate investors know that there is one common thread running through profitable investment decisions in property – the availability of high quality schools and universities. No matter what the housing market looks like, you can almost always expect university towns and neighborhoods located near top performing schools to stay afloat.
The reason for this is not hard to understand. Families that live in a region look for one thing first and foremost – the quality of schools in the area. No parent will be satisfied with the prospect of a low grade education, and very often, their housing choices are determined by the proximity of the school that they wish to send their children to. It stands to reason therefore, that a house that falls within a specified radius of a high quality school will always enjoy a high price, because of its strong demand. Houses like this almost always cost more than similar sized houses that are outside the school’s radius.
Houses within such catchment areas come with a premium price, but are always worth the amount you pay, because the house will retain its value even in the middle of a slowdown in the market. As long as the school maintains its level of education and high ranking, you can expect your house to be valued at a premium. If you intend to rent out your property, you will find a consistently high demand from parents who wish to live close to the school in which their child has secured admission.
For this reason, localities that are close to universities are very profitable from a real estate investment point of view. With a student property, it is very possible to achieve high capital growth, simply because there is always a supply of investors who wish to buy the property, and then rent it to students. So, if you decide to sell your property one day, you won’t face a shortage of interested buyers.
You will also find a consistent supply of tenants, because every year there are new numbers of students coming in, looking for a place to stay. This cycle continues every year, assuring you of a dependable rental income. On the flip side, you may find that renting out your investment property to a largely student population will result in expenses on repairs to the property, because students are not known for the care they take of the house. Even so, you can still enjoy significant rentals, year after year.
Besides this, many companies prefer to be located in close proximity to colleges and universities, because of the consistent availability of a high quality work force. This in turn, boosts your rate of capital growth.
So, if you are considering an investment in real estate, look for areas with top schools nearby, or in university towns because the ROI in these areas is always assured..
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