A primary strategic force when investing in real estate has and will always be – the property’s location. Those who have an interest in a property that is located near a school would greatly benefit from understanding the potential advantages and drawbacks of an investment property near a school.

The Benefits of Investing Near a School

Owning an investment property near a school can be a wise investment. The proximity to a school becomes an appealing feature for future residents – especially to those residents with children. For example, living in a property that is close to their child’s school offers parents and children the opportunity to walk to school together.

Investors choosing a home in a neighborhood near a school may find these properties offer these additional benefits.

Homes Tend to Have a Higher Property Appreciation Potential

Properties that are located near a school tend to appreciate at a faster pace than similar properties farther away from a school. In fact, according to the National Bureau of Economic Research, there is a clear and defined correlation between home values and school expenditures for the homes in the school district.

One of the likely reasons for this positive correlation is that parents of school-aged children are often willing to pay a convenience premium (higher rent - which increases values) for a residence that is near their child’s school. In addition, homes in these areas tend to have abundant access to services and goods, making the properties desirable to potential renters.

Neighborhoods With Schools Tend to Be Family-Friendly, Offering Access to Community Amenities

Properties located near schools also offer renters (or owners) a friendly, safe setting to raise a family.

These family-friendly features serve the school as well as the community and neighborhood’s residents. These amenities include parks, playgrounds, walking trails, dog parks, and other facilities – a great benefit for families, especially with young children.

Rental Properties Near a School Offer a Consistent Pool of residents

Most families try to remain in the same home throughout their children’s time in school. This decision not only benefits their children but is also their kids’ preference. For investment property owners, this translates to fewer resident turnovers and the reduction of expenses that are generated from readying a unit for a new resident.

Drawbacks of Investing in a Rental Property Near a School

Like every investment, there are drawbacks that must be considered. So, if you have an interest in investing in real estate near a school, consider these potential disadvantages.

The Neighborhood Can Be Noisy & Busy – Especially At Peak School Times

Any property in close proximity to a school may experience increased noise levels compared with those homes located at a further distance from the activity on school property.

The occupants of a house near a high school could easily hear the school’s bell, sounds from a marching band practicing on school property, or the roar of the home crowd when the school’s football team scores a touchdown to beat a town rival. Renters without children may find these and other after-school sounds noisy enough to be a nuisance and disruptive to their peace of mind.

In addition, during drop-off and pick-up times, kids can get loud and rowdy after a confining day in school.

Traffic Jams During Pick-up and Drop-off Hours

Those living on a property near a school will also have to contend with increased traffic. During peak times, there will be more moving vehicles, a line of school buses waiting for the school bell, and foot traffic on sidewalks and lawns. This increased traffic activity can make it quite challenging to move around the streets near the school at certain times of the day.

These higher traffic rates – during drop-off and pick-up times can potentially impact a resident’s commute or reduce parking options near the property. For those with limited patience (or are in a hurry), congested streets and stalled traffic can be exceptionally irritating, stressful, and a drawback to living in a house near a school.

Increased Competition

Another drawback of owning an investment unit near a school is the ever-increasing competition from other real estate investors. The advantages of this slice of the real estate market have become more well-known by both new and experienced investors.  So, if you are just beginning your rental property search as a real estate investor, anticipate that you may encounter intense competition.

The Bottom-Line: Real Estate Offers a Recession-Proof Investment

Investors that own an investment property that is near a school have selected an investment strategy that has been shown to buck recession trends. This is because, despite any dreary economic outlook, families with children will always need a convenient place to live near a school. As a result, rental property investments near schools are among the safest types of real estate options.

Are you interested in purchasing real estate near a school? If you are new to the neighborhood or real estate investing, speak with a real estate professional, like a property manager or attorney, who can offer insight and guidance obtained from years of experience.