College students will be returning to their dorms in massive numbers nationwide this time of year. Near many universities located on the coasts, such as Stanford, the University of California at Los Angeles (UCLA), Georgetown University and many others, returning students will be paying over-market rates for their leases, which typically last between nine months and a year.
“Tuition for many colleges and universities is soaring, forcing students and their families to utilize single-family rentals (SFRs) and other living situations off-campus,” says Steve Hovland, director of research for HomeUnion®. “To minimize living expenses, students in high-rent areas like the Bay Area, Boston and Washington, D.C., can rent properties further than two miles from campus or choose to have roommates in a rental home. But if these options are still too expensive for them, and debt burden is a major concern, students can choose to attend universities in Sunbelt markets.”
To help these students make affordable rental living decisions, and to provide single-family rental (SFR) investors with insight into submarkets with solid rents and low entry prices, HomeUnion® Research Services has compiled a list of the most inexpensive college towns for off-campus living.
“It’s not surprising that many of the institutions in our study are located in Sunbelt markets – Texas and Florida,” remarks Steve Hovland, director of research for HomeUnion®. “Rents are still very reasonable near campuses that are highly sought-after among SFR investors, such as Austin, Orlando and Dallas.” “Real estate investors are bullish on these investment markets due to attractive entry prices and yields. They all have solid cap rates above 4 and 5 percent, and entry prices below $300,000.”
Here’s a list of seven college towns with the most affordable off-campus rents based on the discount between near-campus rents and market rents:
|
University |
Submarket/Metro | Median Rent <2 Miles | Market Rent | Market Difference | Cap Rate |
Metro Median Home Price |
| Texas State University at San Marcos | San Marcos, Texas/Austin |
$1,123 |
$1,670 | -32.8% | 4.0% |
$274,400 |
| Valencia College | Orlando, Fla. |
$1,225 |
$1,502 | -18.4% | 4.9% |
$203,100 |
| University of South Florida | Tampa, Fla. |
$1,166 |
$1,429 | -18.4% | 5.3% |
$179,200 |
| University of Texas at Arlington | Arlington, Texas/Dallas |
$1,372 |
$1,639 | -16.3% | 5.3% |
$202,000 |
| University of North Texas at Denton | Denton, Texas/Dallas |
$1,419 |
$1,639 | -13.4% | 5.3% |
$202,000 |
Source: HomeUnion® Research Services
HomeUnion® also compiled a list of the off-campus student housing markets with the highest rent burdens:
|
University |
Submarket/Metro | Median Rent (<2 Miles) |
% Above Market |
| University of California, Los Angeles | Los Angeles/Westwood |
$5,158 |
85.2% |
| Stanford University | San Jose/Stanford, Calif. |
$6,066 |
68.3% |
| Georgetown University | Georgetown/Washington, D.C. |
$3,433 |
60.0% |
| George Washington University | CBD/Washington, D.C. |
$3,417 |
59.3% |
| Michigan State University | East Lansing, Mich. |
$1,715 |
58.6% |
| University of Miami | Miami/Coral Gables, Fla. |
$3,097 |
47.0% |
|
West Chester University of Pennsylvania |
Philadelphia/West Chester, Pa. |
$2,292 |
46.8% |
| University of California, Irvine | Orange County/Irvine, Calif. |
$4,372 |
43.4% |
| University of California, Berkeley | Oakland/Berkeley, Calif. |
$4,134 |
34.2% |
| Florida Atlantic University | West Palm Beach/ Boca Raton, Fla. |
$2,786 |
34.1% |
Source: HomeUnion® Research Services
