College towns with the best foreclosure buys

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For parents with college-age kids and a stomach for real estate investment, RealtyTrac Inc. has released its top 10 list of college towns with the best foreclosure deals.

Palo Alto, Calif. (Stanford University) is No. 1, with foreclosure homes selling for 69 percent below properties not in foreclosure. Columbus, Ohio (Ohio State) was second, with foreclosures there netting a 58 percent discount. The figures are for the first half of 2011.

The only Florida city to make the list was Tallahassee (Florida State, Florida AM) at No. 8. Its discount is 35.43 percent.

Gainesville is not far behind at 35.04 percent. The home of the University of Florida didn’t make the cut because RealtyTrac wanted to keep the list as geographically diverse as possible, spokesman Daren Blomquist said.

Miami (Florida International University) also could have been on the list, with an average discount of 43.51 percent, but RealtyTrac weeded out areas that aren’t considered traditional college towns.

By the way, Boca Raton (Florida Atlantic) sports a foreclosure discount of 31 percent, while Orlando (University of Central Florida) has a discount of nearly 19 percent.

Sorry, Miami Hurricane fans. RealtyTrac, an Irvine, Calif.-based foreclosure listing firm, had no data for Coral Gables.

Foreclosures in college towns can be a great investment for parents tired of paying rent and interested in making a little extra money, Blomquist said.

“If you’re an investor using the buy-and-hold strategy, you do have a built-in-pool of renters,” he said.

But there are downsides: Rowdy college kids = more maintenance costs. And if you don’t find a renter at the beginning of a semester, it may be a while before you do, Blomquist said.

Click here for a photo gallery of the top 10 towns.

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