Most investors think of college towns as good places for real estate investments because they tend to have relatively affordable housing, a steady stream of potential tenants and buyers, and are somewhat recession-resistant. However, as CNBC Money reporter Sarah Berger put it, “Some college towns make for much savvier investments than others.”

In a recent study released by listing website, the company’s researchers identified 10 college towns currently posting yields at 10 percent or higher of the purchase price. The study measured yields based on average monthly rental income for a three-bedroom unit and average purchase price for that unit. It assumed annual rent, not just rental income during the school year. The study population of towns and cities was pulled from WalletHub’s “2018 Best College Towns & Cities in America” report.

The Top 5 College Towns and Cities

According to the report, the top five cities are:

  1. Champaign, Illinois
    average yield: 14%
  2. Rochester, New York
    average yield: 13.49%
  3. New Haven, Connecticut
    average yield: 12.14%
  4. McAllen, Texas
    average yield: 11.16%
  5. Providence, Rhode Island
    average yield: 10.93%
Pros and Cons from the Report

According to the report, several common assumptions about investing in college towns may be wrong. For example, large towns and cities “do not necessarily give the highest yields” but, the researchers noted, “larger populations (300,000+) typically promise an easier search for tenants.” Of populations of that size or larger, Corpus Christi, Texas posted the highest returns with 10.52%. Overall, the city was seventh on the list.


Categories | Article | Market & Trends
Tags |
  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at or reach Carole directly by emailing

Related Posts


Submit a Comment