How’d the Housing Marking in College Towns Fare Post-COVID?

Distance learning and COVID-19. This combination is every parent’s worst nightmare. It creates the perfect storm of stress, madness, and desperation. But, parents are making the best out of a terrible situation because education can’t be put on hold due to a global pandemic.

The real question is what if you have kids in college? The question many people have is regarding COVID-19’s impact on college towns.

HomeLight’s Q3 survey reveals that the coronavirus has left college towns in a tough spot. Local businesses such as bars and restaurants rely heavily on college students to keep business afloat. However, 2020’s fall semester has proven to be more detrimental than some would expect.

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University towns become ghost towns

Many colleges and universities have shifted from in-person learning to distance learning and sent their students home. The result of the mass exodus has rendered many of these towns a proverbial ghost town.

According to insights from top agents who participated in HomeLight’s Q3 2020 survey, this student housing market in these cities are predicted to increase from 5.2% during the 2019 fall semester to 7.4% in 2020’s fall semester. Unit vacancies have increased by 1% during that time and because of this, property owners will have no choice but to lower their rental fees just to get people through the door.

Some towns are unaffected

Although some major universities said they were discontinuing in-person learning in favor of remote learning, there are universities who are keeping in-person classes. In these towns, landlords are likely to see an influx of rental applications if/when on-campus housing closes.

Real estate investing is on shaky ground

For real estate investors, buying rental properties in college towns seems like a gold mine – especially if the rent is going to be cheaper than an out-of-state student paying for room and board on campus. For example, the average monthly rent for Ann Arbor, Michigan is about $1,600 and room and board at University of Michigan is $11,996.

Now, room and board at the university may be cheaper, but when you factor in other living expenses, it could add up quickly. However, if four students rent a 4-bedroom apartment that costs $3,300 per month… Each student would pay $825 per month or $9,900 per year, which is quite a bit cheaper, especially when you factor in that the students aren’t staying on campus the entire year.

Inventory fluctuates

Thirty percent of real estate agents that participated in the survey state the rental vacancies in their area have either stayed the same or are starting to decline. Even though the housing market in a particular area may differ from others, 81% of agents said their inventory is at an all time low, despite the fact that many landlords are selling their rentals.

The truth of the matter is this, COVID-19 has affected almost every aspect of our lives and the housing market in university towns remains on shaky ground. As more students and faculty contract the virus, universities are closing their doors and students are going home. Even students who live off campus are leaving the area and are going back home to save money.

Local businesses in university towns are suffering due to a lack of patronage. Unless schools open back up in a safe manner, who knows what the 2020 Spring semester will fare. Will students return to university? Will real estate investors start investing again? Will the economy pick back up?

There are just so many questions that cannot be answered right now. But, we’re keeping our fingers crossed and are hoping for the best.

The Eco Revolution in Property Investment

Many of us are now making more eco-friendly and environmentally conscious decisions every day. Whether it’s taking our own carrier bags to the shops, having a reusable water bottle or recycling your tin cans – little changes are making a big impact. When it comes to property, the eco revolution has increasingly been making waves. From solar panels to energy efficient light bulbs, our properties are becoming better for the planet. These priorities are also affecting property investment, with an increasing number of tenants looking for eco-friendly essentials in their property.

Eco-friendly homes are becoming increasingly popular with a new environmentally conscious generation starting to look for rental properties. Young professionals who are living in the city are less likely to buy a home than ever before, so are looking for a rental property that meets their exacting requirements. With many of them choosing to make environmentally friendly choices, like going plastic free or cutting down on how much meat they eat, accordingly they are looking for eco-friendly homes too.

Environmental impact is increasingly on the agenda of consumers in every aspect of their lives. Many are also willing to pay a premium for eco-friendly purchases. Research has shown that UK consumers would pay an average 10% more if they were buying something they thought had a positive impact on society. Property investors would be wise to bear this in mind when looking for new property investments. In an increasingly competitive rental market, the ability to raise prices because of eco credentials is a lucrative option for investors.

Furthermore, 40% of consumers think that sustainability is important when they are making a purchase. The impact of this can be seen in the growing number of brands and businesses that are making their environmental commitments obvious to consumers. It is clear that savvy property investors can be both environmentally friendly and business smart when looking to purchase new properties.

In another study, 80% of tenants believed that their landlords should be considering the environment more, and suggested measures like double-glazing, insulation and eco-modifications. These simple measures can make a large impact on the appeal of a property to prospective tenants. Increasing energy prices are another concern for occupants. In addition, 55% of renters asked said they would prefer a rental property with a smart meter if it was the same price. Energy efficient measures are both good for tenant’s monthly costs and for the environment so buy to let property investors can be at an advantage if their property offers these.

As of April 2018, buy to let landlords are legally required to have an EPC rating of E or above in their properties. This means that property investors are increasingly looking at new build properties which are already energy efficient and don’t require costly renovations. Tenants can also legally request that a landlord makes property improvements if the EPC rating is F or G.

Developers are increasingly taking sustainability and environmental impact into consideration when building new properties. Properties with energy efficient specifications, like many by RW Invest  are providing investors with lucrative returns and high tenant demand. Recent changes to regulation mean that new build properties need to be energy efficient and this is making a huge impact on the buy to let market.

The trend towards environmentally conscious properties looks set to continue, with eco-friendly qualities high on the agenda of both potential tenants and investors.