Top college town markets

MarketWatch recently reported investors are showing interest in buying rental property in college towns due to the high demand for rental property and low vacancy rates. Move.com identified the top college towns for investors to purchase property in, including Boston and Cambridge, Massachusetts and in Nashville, Tennesee.
The news source reported the Boston/Cambridge market is home to more than 50 colleges and has a median home price of $335,000. Average rent in Boston is $3,122 for a two-bedroom unit and $3,913 for a three-bedroom.

Paul Turcotte, a RE/MAX broker in Boston, told Move Inc in an interview, "In Cambridge and some of the Boston-proper neighborhoods we have been seeing rents rising with demand and projections of further increases of up to 25 percent."

In Nashville, Tennessee, the median house price for June was $189,900, while two-bedroom rentals cost $949 a month on average and three-bedrooms $1,020. While not as expensive as Boston, the Nashville market has 16 schools in the area that keep rental properties full.

Terry McAllister, a Nashville broker, told the news source, "Nashville is a strong investors market for those looking to target the college and graduate student renters."

Investment in rental property is an investor's best option, according to The Wall Street Journal. The news source recently reported the Obama administration is developing a plan to turn foreclosed properties clogging the housing market and driving home prices down, into rental properties to meet the increasing demand for rentals. Only foreclosed properties owned by Fannie Mae or Freddie Mac will be included in the plan. The government-sponsored entities own about 125,000 unsold or repossessed properties, while another 830,000 of their homes are in foreclosure.

According to the news source, one proposal includes selling packages of foreclosed properties in bulk to investors that will turn them into rental properties. This will speed up the process of removing them from the market and help boost home prices. Another option is to let investors collaborate with Fannie Mae or Freddie Mac by investing in a pool of recently converted rental homes. Investors would pay for rehabilitation and maintenance of the properties while a national property management company would be the landlord of the properties.  

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