Should investors buy a property near a school?

When looking to buy an investment property, there are a number of questions which will be going through your mind, but one question which might pop up is whether you should buy an investment property near a school.

Families with children who are looking to buy a property as their primary place of residence will tend to put the school catchment areas at the top of their priority lists, as there might be a certain school they would like their children to attend to get the best possible education. However, does the same apply to a property investor?

A property investor generally wants a good investment that will go up in value. Buying a property close to key amenities such as public transport, shops and schools is seen as a plus as renters don’t want to travel too far in search of these amenities. Ideally tenants want these amenities on their doorstep within walking distance so buying a property that has all your major amenities close by will be easier to rent than one which is out in the sticks.

As a greater number of property buyers and renters are paying more attention to school catchment areas, does this mean that property investors should pay more attention to buying a property close to a school?

There are a number of advantages and disadvantages of buying a property near a school, so to help you decide I have listed these reasons below.

Advantages of buying an investment property near a school

  • Higher property prices - If it’s a prominent school with an excellent reputation then when it comes to sell, the property might sell for a premium due to being within a school catchment area and is attractive for many potential buyers who might have children looking to attend this school.
  • Greater rents – Due to being located within a school catchment area, investors can charge higher rents for the privilege of living close to their desired school.
  • Longer tenancies – Typically, rental tenants will stay in the property longer if they have children attending the school, reducing your risk of period of vacancy. The same applies for teaching professionals who rent your property as they will want to live closer to their school or university that they work at.
  • Walking distance – Living close to a school can mean that students can walk to school rather than rely on buses, trains or a lift from their parents. This can reduce travel costs as well as free up the time of parents taking their children to and from school.
  • Safer neighbourhood – School catchment areas and school zones tend to be monitored more closely, making it a safer neighbourhood to live in.
  • Sense of community – A property close to a school will also mean tenants will live amongst a community and can be a vibrant place to live.

Disadvantages of buying an investment property near a school

As well as there being advantages to buying an investment property near a school, there are also some disadvantages. These include:
  • Noisy – Living close to a school can be noisy. Throughout the day you might hear children playing at lunchtime, or from sporting games after school as well as the school bell or fire drills. However, if your tenants work during the day, then this might not be an issue.
  • The school can change and could worsen – The school might have a good reputation when you first buy it, but it could also go downhill. There might be some students that wreak havoc and could cause damage to your property such as graffiti or constant littering.
  • Increased traffic – Traffic within a school catchment area, and close to a school will undoubtedly be busier, especially in the mornings and after school and there may be school buses waiting alongside the roads.
  • Parking – As with increased traffic, there is also the issue of lack of parking. Parents might park outside your house or along your road when dropping or picking up their kids from school which can be an issue.
  • The school might not be there in years to come – The school might be fully open and functioning today, but it might not be there in years to come. To try to avoid this, you should look at buying close to a prominent school that has an excellent reputation and long history.
You should also remember that as the property investor and owner, you will not be living in the property. You need to think about it in terms of the rental tenant. Would your tenants want to live here? Remember to do your research first to see the types of properties that are already in the area and who the typical demographics are and what the vacancy rates are.

Also, are there other amenities close by such as public transport, major roads, parks and shops? Typically if your core tenants are families with children then they will want to live within walking distance of other amenities and the same applies to professionals.

So although buying an investment property near a school with a good NAPLAN score can be a good thing, you should consider this as more of a bonus. As a property investor, there are more important things you need to consider first which will have more of an impact on your investment. These include:
  • Location – What other core amenities are close by, such as public transport, major roads, shops, restaurants, parks and schools.
  • Vacancy rates – What are the vacancy rates like? You want to avoid areas with a high vacancy rate.
  • Demographics – Who are the types of people already living here and how many households are rented? Also consider the type of property and what size is most popular, e.g. two bedroom apartment.
  • Supply and demand – What is the supply and demand like for properties? If you are buying an apartment, how many apartments are in the area already? Ideally you want to invest in an area that has high demand and low supply.
  • Future developments – Are there any future developments such as a new train station that might have a positive or negative effect on your property?
As long as your investment property is the right type, in a good location close to important amenities and facilities then buying an investment property within a school catchment area can be a major plus, particularly when it comes to selling. Just remember, it’s all about location, location, location.
Published on 11th of August 2015 by Marty Stanowich
Marty Stanowich
Marty Stanowich

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