11.20.2024 PropStream
Disclaimer: PropStream doesn’t offer investing advice. We recommend consulting a professional before buying real estate in the following ten college towns.
With closures related to COVID-19 primarily behind us, most college students have returned to campus. So, now could be an excellent time to get your foot in the door and invest in student housing if you’re interested in exploring this buy and hold niche.
Why Student Housing?
Student housing can attract consistent demand and higher rents. Plus, student tenants tend to have lower quality expectations.
Related: The Pros and Cons of Investing in Student Housing
If you haven’t invested in student housing, you may want to seek properties with low purchase prices and high growth potential for your first few properties.
Not sure where to look? Below, we’ve listed the top 10 college towns to invest in based on their return potential vs their purchase price. Specifically, we share each town’s median home price, the average percentage change in home prices compared to 12 months ago (from September 2023), and the projected percent increase in home price in the next five years.
Additionally, we describe factors that might attract students, such as the quality of the education provided by local universities, the city’s walkability, and local amenities.
Note: Though most of these college towns have smaller populations, they each have high ROI potential due to their projected growth in home prices compared to their current prices.
Since the median home prices are relatively low compared to the national average (approximately $417,700 in Q4 of 2023), these are also ideal for newer college-town investors without significant capital for a down payment. After building a decent portfolio, you may consider selling your starter properties and moving onto pricier properties in more populous college towns for more significant returns.
Table of Contents
Key Takeaways:
- Several factors make a region an enticing region for students, such as walkability, education, and local amenities. Understanding what students may look for can help an investor choose the best location and properties.
- For investors just starting out in the student housing niche, inexpensive properties with strong growth potential are prime leads. Smaller college towns may make getting a starter property more accessible.
- With PropStream, a landlord can find leads in any region of their choice, using robust datasets and advanced filtering capabilities to find the best property leads.
1. Indiana, Pennsylvania (Indiana University of Pennsylvania)
- Median home price: $160,500
- 12-month price change: 19%
- 5-year price projection: 12%
Jimmy Stewart's birthplace, Indiana, is a small town of about 14,200. It’s home to Indiana University of Pennsylvania, a public university founded in 1875 with 9,254 students. The university ranks second for the state’s most affordable college and is the town’s largest employer.
Walkscore.com gives Indiana a walk score of 87 out of 100 and a bike score of 73 out of 100. This means it’s easy for students to run most errands without a car.
2. McPherson, Kansas (McPherson College)
- Median home price: $179,800
- 12-month price change: 14%
- 5-year price projection: 14%
Named after a Civil War General, McPherson is a small town in central Kansas with a population of 13,865. It’s home to two colleges: Central Christian College of Kansas and McPherson College, which is ranked #27 out of 83 Regional Midwest Colleges.
After class, students can enjoy plays and movies at the historical McPherson Opera House or the local restaurants, public parks, and outdoor attractions. The town is relatively walkable, with a walk score of 79.
3. Brownwood, Texas (Howard Payne University)
- Median home price: $183,800
- 12-month price change: 17%
- 5-year price projection: 20%
Located in the heart of Texas, Brownwood is a town with about 18,000 residents. It’s home to Howard Payne University, a Christian liberal arts college with over 100 majors across seven schools. It ranks #30 out of 103 Regional Colleges in the West, and in 2022, Forbes ranked it #61 out of 905 private institutions of higher education.
Though relatively car-dependent with a walk score of 39, Brownwood has a recreation center, two pools, and plenty of other amenities to keep students entertained.
Plus, the city’s real estate prices are expected to increase by 20% in the next five years.
4. Arkadelphia, Arkansas (Henderson State University)
- Median home price: $151,300
- 12-month price change: 11%
- 5-year price projection: 16%
Nestled in the foothills of the Ouachita Mountains in Arkansas, Arkadelphia is a small town with a population of 10,258. It’s home to Ouachita Baptist University, a private liberal arts college founded in 1886, and Henderson State University, a public liberal arts college founded in 1890 with about 2,400 students.
With a walk score of 61, Arkadelphia is somewhat walkable. However, students with cars can also enjoy the Ouachita National Forest and Hot Springs National Park (thirty miles north of town).
5. Winfield, Kansas (Southwestern College)
- Median home price: $143,300
- 12-month price change: 44%
- 5-year price projection: 13%
Founded in 1870, Winfield is a small town of 11,700 residents in Kansas. It’s home to Southwestern College, founded in 1885 and ranked #47 out of 83 Regional Midwest Colleges. The school has an attractive 11:1 teacher-to-student ratio and offers financial aid to all of its students.
Winfield has a relatively high walk score of 76, a vibrant downtown, plenty of restaurants, and even a city lake.
6. Williamsport, Pennsylvania (Pennsylvania College of Technology)
- Median home price: $136,800
- 12-month price change: 3%
- 5-year price projection: 13%
Located along the West Branch Susquehanna River in central Pennsylvania, Williamsport is a city of about 27,000. It’s home to Pennsylvania College of Technology, which ranks #6 out of 52 North Regional Colleges, and Lycoming College, a private liberal arts college founded in 1812.
Walkscore.com describes Williamsport as a “walkers’ paradise,” with a walk score of 91. Additionally, the city has a bike score of 83. Prospective college students can ride their bikes along Pine Creek Rail Trail and enjoy the nearby state parks.
Plus, if you want to invest in real estate with little money, it’s hard to beat a median home price of $136,800.
7. Clinton, South Carolina (Presbyterian College)
- Median home price: $154,200
- 12-month price change: 4%
- 5-year price projection: 18%
Clinton is a small town in South Carolina with a population of about 7,500. It’s home to Presbyterian College, a private liberal arts college founded in 1880 with about 1,000 students and an average class size of 14-17 students.
Prospective college students can look forward to exploring the historic downtown, the Whitmire Wildlife Sanctuary, and the Enoree River. The town has a walk score of 63.
8. Murray, Kentucky (Murray State University)
- Median home price: $212,300
- 12-month price change: 27%
- 5-year price projection: 18%
Located in the southwestern corner of Kentucky, Murray has a population of about 17,500. It’s home to Murray State University, which ranks #31 out of 136 South Regional Universities and #9 of 47 Best Value Schools in the Regional South. It’s a four-year public university with a total enrollment of nearly 10,000.
The city has a relatively high walk score of 79, making running most errands on foot easy. College students can enjoy three city parks, two movie theaters, and a thriving college sports program.
9. Lubbock, Texas (Texas Tech University)
- Median home price: $261,100
- 12-month price change: 14%
- 5-year price projection: 18%
Lubbock, Texas, is by far the largest city on the list, with a population of about 264,000. It’s home to Texas Tech University, which enrolls over 40,000 students and ranks #216 out of 439 National Universities.
Lubbock has a walk score of 68 and plenty of nightlife, transportation, shopping, and restaurant options. It’s also close to Caprock Canyons State Park and Buffalo Springs Lake, offering students opportunities to enjoy the outdoors.
10. Atchison, Kansas (Benedictine College)
- Median home price: $156,400
- 12-month price change: 57%
- 5-year price projection: 5%
Located along the Missouri River in the northeast corner of Kansas, Atchison has a population of about 10,700. It’s home to Benedictine College, a private liberal arts college that ranks #8 out of 83 Midwest Regional Colleges and has over 2,100 students.
Atchison has a high walk score of 82 and a bike score of 57. Prospective college students can enjoy the city’s rich history, including twenty sites on the National Register of Historic Places and Amelia Earhart’s birthplace.
Find Opportunities in These College Towns with PropStream
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Frequently Asked Questions (FAQs)
How do I evaluate the potential return on investment (ROI) for a property in a college town?
Consider the home price, financing costs, the college town’s average appreciation rate, rental rates, and property expenses. From there, you can estimate the property’s potential ROI. Use the “5-year price projection” listed under each college town above for an appreciation rate estimate.
What’s the most common mistake investors make when buying college town real estate?
Some of the most common mistakes include underestimating maintenance costs (college students are transient and not always the most responsible tenants), failing to account for the seasonality of demand (many students stay for the school year but stay somewhere else in the summer), and overlooking local regulations regarding student housing and rental properties.
Are there amenities that make a property more attractive to college students?
Absolutely. Proximity to the college campus, furnished units, high-speed internet, laundry facilities, plentiful parking, and common areas such as clubhouses and pools can make a property more attractive to potential student tenants.
How important is it to consider the academic reputation of the local university when investing in student housing?
Very important. The academic reputation of the local university can impact rental demand, appreciation rates, and the quality of tenants—all of which can affect your potential return on investment.
Notes on sources:
- Best college town data taken from a 2023 study conducted by HireAHelper
- School rankings taken from U.S. News Education Rankings
- Walk and bike scores are taken from Walk Score
- Population data taken from the U.S. Census Bureau
