If you’ve got a spare room, it could be a gold mine — especially if you’re in a college town or live close to a campus. Or, if you’re looking to buy an investment property, it’s worth scouting out a house in a nearby college town. Here’s why: An August 2016 analysis found that rent within a two-mile radius of a university’s campus is significantly higher than the market rate. In fact, in one college neighborhood, rent is an astounding 80 percent higher in off-campus homes within a 2-mile radius of the school than the market rate.
These 10 rental markets are the hottest in the nation, according to the study done by HomeUnion, which is a residential real estate investment management firm. For the analysis, the firm looked at median rent within a two-mile radius of a university’s campus and compared it to the metro area’s market-rent rate. Colleges with enrollment of 15,000 or more students were included in the study.
- The Westwood neighborhood in the Los Angeles-area reigns supreme on the list. This student-heavy neighborhood near the University of California, Los Angeles is 80 percent above the market rate in greater Los Angeles. Median rent is $4,343 in the area, far higher than market rental rates which are $2,409. UCLA is also one of the most diverse campuses in the world, and boasts a high international student population with students coming to the school from 100 different countries. More than 3,500 international students make up the student body population, accounting for 12 percent of all students, according to an enrollment report from the school.
- A second California city tops the list. In the tech-centric Palo Alto neighborhood nearby Stanford University, median rent is 63 percent higher than the market rate in greater San Jose. An average rental rate near campus is the most expensive on this top 10 list, coming in at $5,705. That compares to the market rate of $3,499.
- The No. 3 spot goes to the pedestrian-friendly Coral Gables neighborhood, where University of Miami students pay rental rates that are 44 percent higher than the greater Miami area. Rent is about $2,818 compared to the $1,916 market rates.
- One of the nation’s most prestigious universities, Harvard, also tops the charts for high rent. The rental rates in Cambridge are 44 percent higher than greater Boston. In Cambridge, rent goes for $3,287, compared to $2,276 in the Boston-area. Fun fact: Cambridge is known as the “City of Squares” because of the major commercial districts that are broken into squares. The Inman Square, a retail district with strong Portuguese and Brazilian influences.
- A tie with Harvard students, those attending the University of California, Berkeley and living in Berkeley, a notably politically liberal city, also pay 44 percent more than cohorts in the great Oakland area. The median rent near campus is $4,070 compared to $2,822 in the Oakland area.
- Next up on the list is the East Salt Lake City (or SLC as locals call it) neighborhood near the University of Utah. Rent there is 41 percent higher than rent in Salt Lake City, the capital city of Utah that was founded by Mormon leaders. The median rent near campus is $2,043 compared to $1,443 in greater Salt Lake City.
- Students attending the University of Texas, Dallas pay 39 percent more to live close to campus in Richardson neighborhoods. Median rental rates there are $2,058 compared to $1,476 in Dallas itself. Richardson has a large Chinese population, with a unique China Town. Between Richardson and nearby Plano, there are more than 60 Chinese cultural organizations.
- University of Washington students renting in the University District pay 36 percent higher rental rates compared to those who live in other Seattle neighborhoods. The rental rates are $2,786 compared to Seattle market rental rates of $2,044. The University District is home to indie eateries and funky shops, and, in the spring, draws visitors to see the blossoming cherry trees.
- East Lansing is the only Midwest college town on this Top 10 list, with rent about 35 percent higher in the college-centric neighborhood when compared to Lansing, which is the capital of Michigan. Students living close to Michigan State University can expect to pay a median rental rate of $1,282 compared to $948 in greater Lansing.
- At Portland State University, students will pay 34 percent more to live in the Downtown area compared to other Portland neighborhoods. Rent in Downtown, which is perched on the Willamette River, comes in at $2,327, compared to $1,724 elsewhere in Portland.