Every year, millions of college students flood into college cities and towns in North Carolina. Those students, along with the faculty and staff at their schools, have one common need: housing. Consistent demand for housing makes college and university communities attractive to people interested in real estate investing.  Recently North Carolina area colleges have been included in the 2010 U.S. News & World Report list of the country’s best colleges.  Now seems to be the best time to invest in properties in college towns where housing demand is high due to a soaring rental market according to the New rules of real estate by Business 2.0 Magazine.  With home prices still out of home buyer’s range, and financing more and more difficult to find, rents are expected to increase nationwide. This makes buying investment property in rental markets such as college towns an attractive option, one that is already being pursued by investors. Rents are expected to rise by 5 % by the end of this year according to the National Association of Realtors (NAR), and investors are looking at college towns with increased interest.

Davidson College, located in Mecklenburg county, tied for eighthamong liberal arts colleges nationally, up from nineth last year.  Also tucked away in Mecklenburg county is Queens University of Charlotte whiched ranked no. 23 among universities in the South that grant master’s degrees. 

Also making the list in a different category is Lenoir-Rhyne College in Hickory whiched ranked No. 10 in the category of baccalaureate colleges; Catawba College in Salisbury was No. 14: Belmont Abbey College in Belmont was No. 26. 

Duke University was the only North Carolina school to crack the top 10 national university list this year at No. 10.  Their close rivals, UNC Chapel Hill ranked 28th.

With the down economy, more and more people are enrolling in North Carolina colleges in order to take advantage of the market.  Enrollments are rising at an average of 3% per year in North Carolina.  This is causing rental rates to rise significantly.  The next 3 years will be prime time to invest in real estate in college towns for cash flow. 

As Michael Zaransky, co-founder of Prime Property Investors in Chicago says, prospective investors would do well to pick the college towns that have the ratio of university-owned beds to students at 30 % or lower. One should also look into colleges that propose to expand their student ranks by 2 or 3 % every year.

College and university towns offer attractive options for real estate investors. If you are the parent of a soon-to-be college student, if you are nearing retirement and considering a future move, or if you would like to expand your investment portfolio, consider exploring your options in this area.