Smart investors are always concerned with risk. The idea with any investment, is to mitigate or eliminate as much risk as possible. As both an experienced Bryan College Station real estate broker, and also the owner of a significant personal College Station rental portfolio, I feel strongly qualified to discuss this subject matter. Let’s take a closer look at the risk associated with investing in a student home or a second home in College Station:
Let’s start with the basics and keep it simple. If you have a student at Texas A&M, he or she is going to require housing for a minimum of 4 years. That is just a fact of student life. Renting decent student housing will be costly, averaging $500/month, and it can be much higher! So right off the bat, you’re going to be spending $24,000(4 years x $500/mo) for your student to live somewhere! If you were to have more than one student attending A&M during any time, then you will be doubling that monthly housing expense figure.
Okay, so here’s the good news! Let’s say that you purchase a second home in College Station for $150,000. That home would have to drop $24,000 in value (the amount you would have otherwise spent on renting), before renting would have been the better financial option! And we haven’t seen a declining housing market of that magnitude in Bryan College Station in decades.
What is far more likely to happen in my opinion, is a healthy increase in property values in the coming years. Even with a modest, 5% valuation increase over the next 4 years, you would end up being $30,000 better off owning your own home versus renting! This is why I feel that owning your student’s home in College Station, is smart business with extremely minimal risk.
In addition, as the owner of several College Station properties myself, I can tell you that there are many significant tax advantages associated with owning student housing. This lowers your risk even further. But we will save that discussion for another day!
