| Summary: | There is an exponentially increasing population seeking and enrolling in higher
education. There is a relatively finite amount of established institutions and an ever expanding
population on this earth. Historical urbanization patterns demonstrate that higher education raises
housing demand, and research shows that over time quality education systematically raises
value/prices of the local real estate market. Tax advantages of real estate ownership are
explained. Through an explanation of how appraisals are executed, an understanding of how
value is measured in real estate is developed. The main appraisal method actualized in this
research is the income method. This research uses publicly available market data to illustrate the
opportunities inside University of California, Irvine’s student rental market through quantitative
and qualitative methods. Decades of market data is prepensed and examined to provide a
resolved understanding of public market metrics. Evaluation forecasts regarding profitability
now and in the future are constructed, by paralleling adjacent industry rents and year over year
increases. Through conservative analytical underwriting, and corporate parrelling of rates, the
publicly available rental market is evaluated to exemplify the possible returns and quasi-rents.
Through referencing city, county and state averages, the investment opportunity is brought to
life. Risk is respected in its relationship to quasi-rent opportunities. All in all, this paper seeks to
understand the profitability of a person that positions themselves next to a pre-developed,
growing university, while copying a flourishing private corporate investment system. The overall
findings of this research prove that a dynamic, calculated investor could see returns well above
city, county and state averages if quasi-rents are captured.
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