As a [tag]real estate investment[/tag], college towns make sense now more than ever — if you play your cards right — for the long term. Why college towns? Aren’t they more expensive? And don’t you run the risk of having your investment “partied” to death? You thought being a landlord was bad enough, but now for a bunch of rowdy twenty-year-olds? Yes, yes and yes. College towns are typically more expensive — as much as 20% or 30% more than nearby areas. And yes, students do party, and furthermore, many students aren’t very experienced in the care and feeding of homes.

Like most real estate markets, it’s easy to make mistakes. “Have a clear purpose,” says Spiegel when asked how to think about college town real estate investments. Too many people buy blindly. It’s important to understand which subsegment you’re looking for — ordinary students, graduate students, professors, visiting professors, retirees, research professionals — and where these groups are likely to reside. “It’s no different than any other real estate market — you must understand location,” advises Spiegel. If you’re buying student housing 5 miles from campus, make sure there is transportation, or that students can get parking permits. “The closer to campus, the better.” Finally, make sure you know how the place will be cared for. Hire it out. As a rule, college students don’t have the experience nor the time to do a great job keeping a place up. “The pitfall usually isn’t the property, it’s how it’s taken care of,” adds Spiegel.