Are you brand new or just getting your feet wet with real estate investing? I’m a real estate agent, my friends and I watch HGTV. Let me tell you that there are many ways to invest in real estate. I think a lot of aspiring real estate investors watch home flipping shows and misevaluate the process. It’s more work than most investors are willing to do. Doing your own repairs can save you money, but many investors aren’t general contractors.

In conversations, friends and clients interested in investing in real estate often ask me where to start. I ask if they have thought about college housing for rental income.

Some who would not have the necessary funds for renovations. That can be a problem, but it’s not one the average person can’t overcome. FHA loans have guidelines and restrictions on lending to investors. You can have two non-investor residential loans in Ohio. Properties must be at least 50 miles apart. There are FHA loans for investors and a slightly higher interest rate. FHA 203k loans are for distressed properties and include up to $35,000 for repairs.

The best thing about FHA loans is that they only require a 3.5% down payment. You should know that loans with a down payment of less than 20% require PMI or Private Mortgage Insurance. This is a fee from premium lenders and a federal regulation that protects lenders in the event of a borrower defaulting.

Investors need to understand that when you finance, you can’t do the repairs yourself. It is prohibited and Federal Law. This protects markets from falling as many buyers do not complete necessary repairs, reducing property values. It also protects lenders. If a borrower defaults, the lender would rather have a finished and updated property than a distressed sore on his books.

Now you understand more about financing real estate investments in college housing. Now let me tell you why college housing is all the rage for real estate investors. The rent will always go up. Getting a college education is expensive, not all students want to live in a fraternity. Keeping up with current rental rates, but renting rooms for the same or slightly less than the current price will ensure good occupancy.

In Cincinnati, there are numerous universities and college campuses. An investor would have no problem finding potential properties in Cincinnati for college housing.

Many students work their way through college, taking jobs close to home. Some students really want to save on gas and car insurance. It is very attractive for them to find affordable housing close to school and work. Even better if they can walk, bike, or bus to their destinations.

Advertising your university housing is easy and even free. Simply post your rental properties to the schools. Talk to key figures like the head of the debate team, the quarterback, or the college newsletter or blog.

I like helping new real estate investors, I have no problem with small private investors buying property to use as college housing for rental income. What I don’t like are big real estate investment firms full of capital that jump in, buy all the properties they can at a discount, and charge students a premium.

There is an interesting debate about this. I came across an article “The Dorm Debate” in the New Jersey Monmouth University student-run online newspaper “The Outlook”. In this article, college students pose the question; Should Universities Provide Affordable College Housing?