Real Estate: Investing in College Towns

By Suzanne Woolley - 2012-11-05T17:52:30Z

Photograph by Craig Schreiner/Wisconsin State Journal/AP Photo

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Madison, Wisconsin

School: University of Wisconsin
Students: 42,441
Median home value: $178,700

Madison ranked 17th on Bloomberg Businessweek's list of America's 50 Best Cities. Residence halls for undergrads are at full capacity, and the university expects that to continue. Aside from a new building that will add 158 beds, "we don't have future plans to expand capacity," says Brendon Dybdahl, the university's director of marketing and communications. Michael Zaransky, co-chief executive officer of Prime Property Investors Ltd., which invests in student housing, notes that most major universities are under severe budget stress, so don't have excess money to build or improve university-owned housing. Monthly payments on a 30-year fixed mortgage would be $802; the breakeven horizon is three years.