American University's Washington College of Law is part of the city's collection of more than 20 colleges in the Washington area, and Washington is starting to attract attention from would-be rental property investors. Photograph courtesy Flickr user NCinDC
According to Move Inc., a company that owns real-estate Web sites such as Realtor.com and Move.com, released a list of ten college cities where real-estate moguls (and aspiring moguls) should consider investing in rental property. Washington ranked fourth on that list, behind Boston, Nashville, and Chicago. Real-estate investors may be interested in these cities because housing demand is high, vacancy rates are low, and rental prices are rising, Market Watch reports. Baltimore was ranked eighth on the list.
The DC area was ranked highly because it is home to more than 20 colleges and rental prices are far outpacing mortgage payments. The average rental rate for a two-bedroom unit was $3,214, Market Watch says. A mortgage for such a unit can be secured for a median-priced unit for around $1,530 a month, meaning that landlords can make a killing on the student market in this city.
And, with the Washington Business Journal reporting as recently as August 10 that housing prices are still on the rise—up 2.7 percent from last year and 15.6 percent from the first quarter of this year—investors who buy for the short period of time their children are in college may be lucky enough to come out on top.