When it comes to rental property, college towns are some of the most strategic places to invest—but only if you navigate the challenges sometimes associated with renting to undergrads. You may struggle with student behavior, as some undergrads have a reputation for being rowdy and destructive. This can cause more wear and tear on rental properties, which can be a concern for property owners.

On the other hand, you have middle and high-end properties in college towns where you will encounter graduate students, faculty members, and a large portion of administrative staff who keep the university running. These people have steady jobs and are more likely to keep the rental property in good condition. [1]

Another thing investors should note about grad students, administrators, and faculty is that they are often not looking to buy a home, especially if early in their tenure. Because their career sometimes involves moving to another university, they can benefit from the flexibility associated with renting. However, property owners and managers know that college town rental properties have frequent turnover. While this may be inconvenient, it also means there is always a market for the property. Due to consistent demand, investors will likely not struggle to find new residents.

Places with colleges and universities typically have more renters. One example is Indiana, where most counties have a renter population of less than 25%. However, in counties with a university, the percentage of renters reaches up to 48%. [1]

WHY BAM CAPITAL LOVES COLLEGE TOWNS

Real estate properties in college towns offer unique benefits for investors. However, to capitalize on these opportunities, investors must understand what makes college towns different from other locations.

Rental prices in college towns are relatively stable. They also provide access to a large resident market. Because of the high demand for rentals in college towns, the prices remain stable even when other parts of the housing market fail. Investors can also enjoy fewer vacancies, mitigating cash flow risk.

The area promotes itself due to the property’s proximity to the university—investors can save money on marketing because college employees and students are always looking for a place to live. [2] College towns also have endless activities, including arts, music, culture, entertainment, and sporting events. There are also plenty of shops and restaurants within walking distance. This is why college towns tend to draw people in.

However, college towns also have their disadvantages, the biggest being the frequent resident turnover—it’s a double-edged sword. Frequent turnover increases expenses but also allows the property to maximize the rent (in line with the market) with new leases. Due to the behavior of college students, rental properties suffer from significant wear and tear. For this reason, BAM Capital does not focus on renting to students. Instead, it takes a different approach to college town properties. It focuses on renting to labor forces and professionals who work at the university, hospitals, or other establishments adjacent to the college. This way, investors can still enjoy a steady investment while reaping the benefits of being in a college town.

GROWING ECONOMIES IN COLLEGE TOWNS

Maintaining cash flow is one of the most critical factors for success in multifamily real estate. Purchasing and actively managing a multifamily property in a college town is usually not considered a passive investment. Investors take on the role of landlord and then address concerns such as noise complaints, property damage, and roommate conflicts. It is a very hands-on type of real estate investment.

With BAM Capital, investors can enjoy a passive investment through a multifamily private placement/syndication approach. Accredited investors can still invest in college town real estate without becoming landlords.

There are many factors to consider when choosing a college town for real estate investing. Investors may want to look into the financial situation of the college or university in the area. There may be certain economic factors that can affect the demand for housing in that particular college town. Coldwell Banker Richard Ellis (CBRE) speculated that multifamily demand would rise even further due to “unbundling,” meaning renters would start moving out of their parents’ homes due to new job opportunities allowing them to work remotely and live wherever they want.

WHY CHOOSE BAM CAPITAL FOR YOUR MULTIFAMILY SYNDICATION DEALS?

If you work with BAM Capital, you no longer need to look for an investment property yourself and go through the tedious process of choosing the best cities and college towns. BAM Capital uses multifamily private placement (syndication) to give accredited investors a passive investment vehicle.

Private placement, sometimes called syndication, is when multiple investors pool resources to purchase a single real estate property or portfolio that would otherwise be too expensive. [4]

In a syndication deal, a sponsor locates the property, coordinates the financing, and partners with interested investors. The investors earn money from the cash flow and the equity in real estate. This is a passive investment since the sponsor is also in charge of managing the property and executing the business strategy.

Although any type of real estate can be used for a syndication deal, multifamily is among the most popular, especially multifamily real estate in college towns. BAM Capital will negotiate purchasing and financing high-quality multifamily real estate on behalf of passive investors.

BAM Capital partners with accredited investors who want to enjoy passive income and all the other benefits of multifamily private placement. As the private equity arm of The BAM Companies, BAM Capital’s investment strategy aims to create forced appreciation while mitigating investor risk. To date, the brand has successfully managed over $1.7 billion in assets across ~9,000 apartment units.

Remember that no investment is without risk. Before making financial decisions, consult your investment advisor and schedule a call with a BAM Capital investment team member.

Disclaimer: All investments carry risk, including potential loss of capital. This content is for informational purposes only and is not financial, legal, or investment advice, nor an offer or solicitation to buy or sell any security. Consult an independent advisor for personalized guidance and contact BAM Capital for details on current offerings. BAM Capital and its representatives are not fiduciaries or investment advisors. The information provided is general and may not reflect individual financial goals. Any financial terms, projections, or forward-looking statements contained herein are hypothetical in nature and should not be interpreted as guarantees of future performance or safety. Such statements reflect BAM Capital’s opinion and are subject to market fluctuations, economic conditions, and investment risks. Past performance does not predict future results. BAM Capital and its affiliates do not guarantee the accuracy or completeness of this information. BAM Capital offers investment opportunities under Rule 506(c) of Regulation D exclusively for accredited investors as defined by the SEC. Verification of accredited investor status is required prior to participating in any investment.

© 2025 BAM Capital. All rights reserved.

SOURCES:

[1]: Forbes. (2017). “How To Earn An ‘A’ When Investing In Rentals In A College Town.” https://www.forbes.com/sites/ingowinzer/2017/02/20/how-to-earn-an-a-when-investing-in-rentals-in-a-college-town/?sh=f8319fa5f5f1

[2]: The Balance. (n.d.). “Pros and cons of property investing in college towns.” https://www.thebalancesmb.com/pros-and-cons-of-property-investing-in-college-towns-2124832

[3]: CrowdStreet. (n.d.). “Video Insights.” https://www.crowdstreet.com/resources/topics/trends/cities-multifamily

[4]: The Motley Fool. (2024). “How to Start Investing in Real Estate: The Basics.” https://www.millionacres.com/real-estate-basics/real-estate-terms/investing-multifamily-syndication/

[5]: BAM Capital. (n.d.). “Current Portfolio.” https://bamcapital.com/[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]