There are many factors that go into deciding whether a property is worth investing in or not, but one that may not be on the top of your list: how important is a good school district?
A customer recently completed a flip that sat just across the line into an inferior school district. They were able to get the property under contract for $475,000. They completed two other flips with similar square footage and floor plans that traded for about $550,000. The two schools were frankly, similar in nature, but the perception by homebuyers is that the second school had better test scores and a better reputation - the net result was an almost 15% reduction in value over just a few blocks based upon school district.
This real-life case scenario is proof that good school districts reap the benefits for investors.
According to a recent Trulia survey, 19% of Americans indicated that their dream home is located in a great school district. But among parents of children under 18, the percentage of Americans who want to live in a great school district jumps to 35%, in contrast to 12% of those without kids.
These statistics demonstrate the importance of a good school district for home buying families, and should also be taken into consideration by real estate investors looking to fix and flip.
How can you tell if your investment is in a district that makes the cut? Here are a few things to consider: age of the schools, facility conditions, student-to-teacher ratios, and of course, standardized test scores. However, it is not always a clear cut distinction between school ratings and quality of education, so it is important to understand the difference between actual and perceived reputation of the school district.
Investing in a home in a good school district can pay off. They tend to sell faster and hold more value.
Have questions about real estate investing? Looking for a loan for your next investment property? The Walnut Street Finance Team can help!