College Town Real Estate: Smart Ways to Invest in It

College towns and cities often offer a lot of charm and excitement as they strive to cater to the young adult crowd, but not every family wants to live right outside a campus. Rob Franek, senior vice president of the Princeton Review, says parents or families considering purchasing a first or second home in a college town should keep two key factors in mind when weighing this decision. "Think, would you want to raise a family there? And would you want to retire there?" Franek says. "There is certainly a value that goes along with owning a second home, but it can get expensive in some college towns."

Franek travels nationwide speaking at and researching colleges and provided the following picks for the best college towns for real estate investments. Below are his picks along with pricing data from Zil

 

Average home price in the city: $100,500

Average home price in metro area: $128,700

 

This city is home to St. Louis University and Washington University, Franek says, and adds that its downtown area is undergoing a “renaissance.”

 

“Fifteen years ago, it was really run down in the city,” he says. “Now it’s a Mecca, much because of the university.”

 

See more pictures of this home for sale in St. Louis.

See more homes for sale in St. Louis.

 

ST. LOUIS

Average home price in the Tampa metro area: $128,100 Average home price in Orlando metro area: $146,300 Average home price in Lakeland metro area, between Tampa and Orlando: $106,900

 

Franek says this area is home to Florida Southern University, the University of Central Florida and University of Tampa, and while the size of the schools vary they are all working to make the community around them an extension of the school.

 

See more pictures of this home for sale in Orlando.

See more homes for sale in the Tampa area and the Orlando area.

 

TAMPA-ORLANDO CORRIDOR, FLA.

Average home price in Baltimore city: $96,400

Average home price in Baltimore metro area: $231,600

 

Johns Hopkins University is a huge draw here, says Franek, and makes the city a worthwhile investment. “Johns Hopkins is right in the middle of the city. Hopkins sees Baltimore as an extension of its campus, and the city sees the campus as an extension of Baltimore,” he says. “Students and community are profiting from this.”

 

See more pictures of this home for sale in Baltimore.

See more homes for sale in Baltimore.

 

BALTIMORE

Average home price in Phoenix: $158,400

Average home price in Phoenix metro area: $184,800

 

Franek mentions Arizona State University makes this area a draw, among other downtown universities.

 

“ASU’s President Michael Crow has been building out the university and it is an urban campus,” he says. “Phoenix is a destination spot, so it has a nontraditional population. And if you live there and want to go in and take a class at ASU, that is a great resource.”

 

See more pictures of this home for sale in Phoenix.

See more homes for sale in Phoenix.

 

PHOENIX

Average home price in the city: $507,900

 

There are five colleges in this town, according to Franek, including engineering school Harvey Mudd College, and each school offers unique character and perspective to the location.

 

“All of the schools are fabulously talented, and each school has a unique personality,” he says.

 

 

 

KARE

There are those tenants who are so bad that their landlords force them to leave, then there's the tenant in Minnesota who was so bad that he forced his landlords to leave. That's the story being reported by a local TV station there: A tenant in the home of Terry and Kathy MacDonald of Golden Valley has been so destructive and intimidating that they've fled their house to live in a hotel. And the kicker? Now they are paying him to move out.

 

Here's how the story unfolded, according to KARE-TV in Minneapolis-St. Paul (and as seen in the video below): The McDonalds began renting a basement bedroom to the man (unnamed by the station) in July, under terms that prohibited smoking and drinking in the room. But their tenant not only ignored the ban, he sometimes became so noisily drunk and disruptive that neighbors several times called police. When the McDonalds told him that they wanted him to leave, KARE reports, "he started verbally abusing them and threatening to destroy the home," then acted on his threats by "punching holes in several walls, damaging the fireplace with a hammer, breaking light fixtures, dismantling smoke alarms, and burning holes in the carpet" -- even urinating on it. The McDonalds eventually learned that their tenant, who was briefly arrested on an outstanding warrant, has a record of arrests and convictions.

 

The McDonalds told the station that after beginning eviction proceedings against the man, who is technically their roommate, they felt so threatened by his continued presence that they moved out and eventually decided that it was more expedient to settle with him out of court, paying him $500 to leave by today, as well as returning him his $450 security deposit.

 

"My advice to people is to screen your renters and roommates," said Terry McDonald, "no matter what kind of a first impression they make."

 

Here are some recommendations along those lines for landlords -- that can also apply to roommates:

 

1. Know the law. Research the laws in your state in regarding landlords, tenants and roommates. Sites like Landlord411.com and Nolo.com have information about varying rules, but you might also want to consult a lawyer in your community.

 

2. Check references, but keep in mind that current landlords or roommates might not be honest about problem tenants if they're looking to get rid of them.

 

3. Check applicants' credit scores. If a prospective tenant has had a car repossessed, a foreclosure, or is in significant credit card debt, that should raise concern about that person's ability to pay rent and pay on time.

 

2. Do criminal background checks. In another recent story out of Minnesota, an alleged deadbeat tenant dodged this by using a false name. So also ask for photo ID and other proof to make sure that prospective renters are who they say they are.

 

3. Check with the motor vehicles department. In several states that allow online payments for license tab renewals, the DMV will also have drivers' information available online. Have potential tenants log into the site and show you verification of their drivers license information against the forms of ID they present.

 

4. Take a cashier's check for the security deposit. For the security deposit or first month's rent, require that they pay with a cashier's check. Or if they will pay by personal check, make sure that the check clears at least a week before the move-in date. Though please note: Scammers have been known to write phony cashier's checks, as AOL Real Estate has reported.

 

5. Call their employers. You only want to rent to those gainfully employed, so actually pick up the phone and call employers to see how long prospective renters have been employed by them. If an employer is fairly local, perhaps even make an in-person visit, as it's not unusual for someone looking to scam to also arrange to have someone other than an employer talk to you on the phone. That was the case with serial evicted tenant Pamela Winegardner who maintained several phone numbers and answered them in different voices, just to give herself rave recommendations.

 

More about landlords and tenants:

Evicted Tenant Allegedly Trashes House To Make It Uninhabitable

Former Tenant's Critical Yelp Review Might Be Libelous

Students' Mysterious Housemate

 

More on AOL Real Estate:

Find homes for rent.

Find out how to calculate mortgage payments.

Find homes for sale in your area.

Find foreclosures in your area.

 

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

 

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Mark Humphrey/The Associated Press

 

By Hope Yen

 

WASHINGTON -- U.S. mobility for young adults has fallen to the lowest level in more than 50 years as cash-strapped 20-somethings shun homebuying and refrain from major moves in a weak job market. The new 2013 figures from the Census Bureau, which reversed earlier signs of recovery, underscore the impact of the sluggish economy on young people, many of them college graduates, whom demographers sometimes refer to as "Generation Wait."

 

Burdened with college debt or toiling in low-wage jobs, they are delaying careers, marriage and having children. Waiting anxiously for their lucky break, they are staying put and doubling up with roommates or living with Mom and Dad, unable to make long-term plans or commit to buying a home -- let alone pay a mortgage. Many understood after the 2007-2009 recession that times would be tough. But few say they expected to be in economic limbo more than four years later.

 

"I'm constantly looking for other jobs," says Jeremy Bills, 27, of Nashville, Tenn., who graduated from Vanderbilt University in May 2011 with a master's degree in human and organizational development. Originally from Tampa, Fla., Bills (pictured above at his office job) has stayed put in his college town in hopes of finding a job in management consulting or human resources. Instead, he has mostly found odd jobs like pulling weeds and dog-sitting.

 

Bills says he pursued a master's degree to bolster his credentials after getting his college diploma in 2008, shortly before the financial meltdown. Instead, he finds himself still struggling financially and worrying that the skills he learned in school -- where he incurred $20,000 in student loan debt -- are "kind of atrophying right now."

 

"It's not like riding a bicycle. You can't just jump into a career position so many years after training," said Bills, who now works at a nonprofit organization making $12 an hour and is looking for a second job.

 

Among adults ages 25-29, just 4.9 million, or 23.3 percent, moved in the 12 months ending March 2013. That's down from 24.6 percent in the same period the year before. It was the lowest level since at least 1963. The peak of 36.7 percent came in 1965, during the nation's youth counterculture movement. The past year's decline in migration came after a modest increase from 2011 to 2012, a sign that young adults remain tentative about testing the job market in other cities.

 

By metropolitan area, Portland, Ore., Austin, Texas, and Houston were among the top gainers in young adults, reflecting stronger local economies. Among college graduates 25 and older, Denver and Washington, D.C., topped the list of destinations. Demographers say the delays in traditional markers of adulthood -- full-time careers and homeownership -- may prove to be longer-lasting. Roughly 1 in 5 young adults ages 25 to 34 is now disconnected from work and school.

 

"Young adulthood has grown much more complex and protracted, with a huge number struggling to reach financial independence," said Mark Mather, an associate vice president at the private Population Reference Bureau. "Many will get there, but at much later ages than we've seen in the past. More and more we're seeing many young adults routinely wait until their 30s to leave the parental nest."

 

The overall decline in migration among young adults is being driven largely by a drop in local moves within a county, which fell to the lowest level on record. Out-of-state moves also fell, from 3.8 percent in 2012 to 3.4 percent, but remained higher than a 2010 low of 3.2 percent.

 

Young adults typically make long-distance moves to seek a new career, while those who make local moves often do so when buying a home. While homeownership across all age groups fell by 3 percentage points to 65 percent from 2007 to 2012, the drop-off among adults 25-29 was much larger - more than 6 percentage points, from 40.6 percent to 34.3 percent. That reflects in part tighter lines of credit after the 2006 housing bust. Declines in homeownership for those ages 40 and older over in that five-year period were more modest.

 

The District of Columbia, with its high share of young adults, had the lowest homeownership rate across all age groups at 41.6 percent, followed by New York at 53.9 percent. West Virginia had the highest homeownership rate at 72.9 percent. In terms of births, the birth rate for all women of childbearing age -- 63 births per 1,000 women -- was essentially flat in 2012 from the year before.

 

Meanwhile, overall migration among adults 55 and older held steady at 4.4 percent from 2012 to 2013, up from a low of 4 percent in 2011. Metro areas with the biggest gains included Phoenix, Atlanta, Denver and several in Florida. Many cities in the Northeast, Midwest and coastal areas posted losses.

 

"The post-recession period has given a bigger boost to seniors than to young adults in their willingness to try out new places for retirement," said William H. Frey, a demographer at the Brookings Institution who analyzed the figures. "Many young adults, especially those without college degrees, are still stuck in place. For them, low mobility might be more than a temporary lull and could turn into the `new normal.'"

 

The wait continues for Eric Hall, 30, of Decatur, Ga. After picking up a master's degree in public health in 2008, Hall moved from California to the Atlanta suburb with the plan of living with his parents for about six months.

 

Five years later, after struggling to find work in his field and switching his career path last year from health management to teaching kindergarten, Hall has opted to remain at his parents' home until he can pay off more debt. He is now studying to earn a doctorate in education, amassing college debt of more than $110,000.

 

"It's a bit restraining after going away to college two times, but I'm saving and my mom's been very understanding," said Hall, who is optimistic he'll soon be financially stable enough to live on his own.