Posted by Smart Money on January 11, 2004 at 23:47:05:
I live in a college town and I’ve seen some of that stuff. Has a lot to do with the cost of renting a place and parents reading articles about buying a place for their kids instead of renting so they can get some of their money back.
I wouldn’t compete. I’d consider selling some (but not all) of my portfolio and look at buying where prices are more reasonable (outskirts of town, next town over, etc.) If you’re really ambitious, since you know that prices are crazy, consider selling off some of your property and developing. Contact a local builder to discuss costs, The buy a lot in a place that is zoned multifamily, and build something. I’ll bet you that construction costs will be around $70 per square foot if your builder is innovative. Labor costs probably haven’t sky rocketed yet, and you could make enough on a duplex to own one side free and clear if you sell the other. Heck, you might even be able to sell it before its built if prices are as crazy as you say. That seems like a really good way to cash in without exposing yourself to too much risk.