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When it comes to real estate investing, the ability to identify local markets that are more stable is a big advantage. It means less vacancy for rental properties, higher than average rent rates, and generally better return on investment. But the widespread nature of the housing market crash made choosing good areas much more challenging for real estate investors who invest in residential property for cash flow.

Keeping good tenants and keeping properties cash flowing has been a big challenge for investors over the past several years. High unemployment has created problems for tenants that had been very reliable prior to the market downturn. Interestingly, keeping good tenants in an uncertain economic climate often means identifying those local areas where the economy is stronger. Under the Obama Administrations watch, this translates into college towns and communities with a significant medical presence.

In my home state of Georgia, I’ve noticed that the counties with the lowest unemployment rate also happen to be those counties that have major colleges or universities located there. With the Obama Administration focus on providing stimulus funds for education, and their continued efforts to fund improvements or expansion in this sector, college towns and college communities within larger cities, are enjoying something of a boom because of this.

Investment in rental properties in college towns often means that you can charge more in rent, and it’s usually paid by the parents of the tenant instead of the tenant themselves, which means it can be much more reliable income, and some parents prefer to prepay the rent for several months in advance, which is even better for landlords. And rental properties located near college campuses often sell for a premium due to their advantageous location. Even rural college towns such as Rome, GA, the home of Shorter College, and Berry College, benefit from the influx of college students, which creates demand for rental property.

In addition, communities that have medical facilities in the immediate area are also excellent choices for investment property. A great example of that is the Emory University area near downtown Atlanta, GA. Emory has the University complex, Emory University Hospital, Egleston Children’s Hospital, (a.k.a. Children’s Healthcare of Atlanta) the Centers For Disease Control, and the Atlanta Veterans Hospital Complex, all in one area. Prices for homes and rentals in this area are among the highest and most stable in all of metro Atlanta. The influx of medical students, patients seeking treatment, families needing housing during treatment, and higher paying medical jobs all contribute to a local real estate market that stands in stark contrast to the suburban communities that have no such economic support structure. Government funding that also supports the expansion of education and medical facilities is just the icing on the cake.

When considering investment property in an uncertain world, take a closer look at where government funding is being focused, and how the local economy generates jobs. If colleges, universities and medical facilities are involved, chances are you’ve got an excellent market for investing in real estate no matter which way the economy is headed.