Yahoo Finance Why Rent in College Towns Is Going Up — And How to Save
College towns often have higher cost of living than other cities. A 2023 report by My Area found that a university student’s average monthly rent cost in the U.S. was $735. Now that may not sound like an astronomical amount for many (the average rent price for all apartment sizes in the U.S. is $2,147.
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However, college students have a time-consuming commitment to their studies, and earning enough income to pay north of $700 a month may not be feasible for their academic schedules. And then, of course, there’s the fact that most students are amassing student loan debt as they pursue an education.
Unfortunately, rent in college towns is getting even more expensive. Why? There are a few key factors at play. We’ll explore them and also highlight some expert ways to save.
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High Demand
In recent years, we’ve seen a surge in college applications, and many are deciding which university they’ll attend based not on the location’s affordability, but on the school’s reputation and specialties.
With more people going to college, and many moving out of their parents’ houses, there’s an ever-increasing demand for housing in college towns. This alone drives up pricing, particularly when supply is low — which it can be (look at numerous college cities in California, for example).
The Rise in Luxury Student Housing
Once upon a time, student housing meant a dorm room the size of a closet shared with at least one other person. But there are more options now, and some are pretty high-end.
Now, privately owned luxury student housing alternatives that sport attractive amenities like gyms and outdoor space.
Thanks to these luxury buildings, which few students can afford unless their parents are footing the bill, real estate values and property taxes in college towns are rising. These price hikes can impact the entire community, not just students.
Investors Buying Up Rental Properties
Savvy real estate investors are scooping up property in college towns, well aware that they can charge a pretty penny in rent given the high demand for housing in these locations.
Again, the steep rents investors may impose don’t just hurt college students; they’re potential hurdles for any budget renter in the area.
Need to Save? Get A Roommate or Two
So now that we’ve laid out why college town rent is rising, we need to know how to save on these costs. Your first money-saving move should be to get a roommate or two — you’ll find plenty of people looking to go in on a place with you.
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“The thing about college towns is that there is never a shortage of people looking for roommates,” said Seamus Nally, CEO, of TurboTenant. “If you go on sites like Roomster, Craigslist, Facebook, etc., you can likely find a handful of different potential living situations. Ultimately, you’re going to save money on rent by living with others, and in college towns, there will always be people on the lookout for those opportunities.”
Try Rental Arbitrage
You may not have heard about this option, but it can be a lucrative one, according to Todd Stearn, founder and CEO at The Money Manual.
“It’s like having a roommate, but instead, you rent out a room of your place short-term to travelers on a site like Airbnb,” Stearn said. “You can often make enough money to cover your rent and then some this way.”
Though potentially attractive, rental arbitrage requires some research and it may not be possible to carry out.
“You’ll need to look at both the lease you signed and your state’s landlord/tenant laws on the matter to make sure this is an option for you,” Stearn said. “You’ll also need to consider the risk of property damage you could be responsible for as well as your safety.”
Sublet Your Unit Or Room (Or Even Your Parking Space) When School Is Out
Another option to consider, if your lease allows it, is to sublet your room or apartment when college is out for the holidays or the summer and you plan to be back home.
“You may be able to sublet your apartment or room during the months you don’t need to live there,” said Ryan Barone, co-founder and CEO at RentRedi.
“In fact, students wishing to take an entrepreneurial approach can actually generate income from side gig rentals by renting out their parking space or any extra space that can be used for storage.”
Ask About a Longer-Term Lease
Exploring longer-term lease options with a landlord might save you money on rent.
“The standard lease term is 12 months, but many landlords will offer a discount if you sign on for an extended lease term, like 15 months or more,” Stearn said. “That’s because it will save them the time, hassle and cost of showing the place and screening new tenants.”
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This article originally appeared on GOBankingRates.com: Why Rent in College Towns Is Going Up — And How to Save
