When my husband got a new job and we had to move, one of the most stressful parts of the transition was finding a place to live near a reputable school. I spent weeks researching and comparing districts before finding one suitable for all three of my kids. Only then did I start the search for a new house. All this caused me to have an “a-ha!” moment—that I couldn’t be the only parent who makes their children’s education a priority when moving to a new area. This realization was particularly important because I contribute to our family’s income as a real estate investor. Putting on my business hat, I saw an opportunity for boosting my return on investment by buying distressed properties in good school districts, doing the necessary renovations, and selling to families like my own. Come to find out, there’s solid research to support this strategy too.

Home buyers have many different amenities in mind when they begin their home search—but proximity to a good school district is often the number one priority. According to a recent National Association of Realtors (NAR) survey, school quality was the deciding factor for 25% of home buyers. Another 20% listed school proximity as the pivotal reason for their home purchase. Even more, another study shows that more than half of buyers are willing to pay more than their intended budget for a home in the right district. These are exactly the kind of families that I want to sell my investment properties to!

How Do You Know if a School is “Good”?

Identifying a “good” school is trickier than you might think. With the implementation of Common Core standards nationwide, some parents turn to statistics on annual standardized test performance for comparing how individual schools measure up. While test scores, class sizes, and student-to-teacher ratio do matter to some extent, they provide a very flat perspective of a school’s actual performance. Parents are increasingly concerned about schools that over-focus on “teaching to the test” and are looking for more.

Lower-income families, especially those who may seek out a rehabilitated property like the ones I sell, are less concerned with academic performance than convenience. Research suggests that these parents will choose an underperforming school over a better-ranked school if it is closer to their home, has extended childcare hours, and offers strong extracurriculars.

That said, parents of all income levels tend to look for schools that also provide a more holistic approach to learning and life skills development. Some parents are attracted to a particular school because it fosters social and emotional intelligence like empathy, self-motivation, and adaptability. Others may prioritize finding a school that is compatible with their child’s preferred learning style, whether a traditional approach, a project-based style, or a specific philosophical method. Across the board, however, parents value creative learning opportunities such as music programs and community involvement.

All this is to say that investors should be thinking outside the box about public schools when looking for a home to purchase and rehab. Some of the schools that are considered “the best” are overcrowded, have long waitlists, or simply don’t offer the convenience of a neighborhood school. It can pay to find out about currently lower-ranking schools that show promise of being up-and-coming higher-ranking ones. Here are some signs that a school is popular amongst local parents:

• Active Parent Teacher Organization (PTO). These organizations can also be called a PTA, Booster Club, or even Home and School Club. Commonly known for raising funds, they also drive other school community-building projects such as parent education events, teacher appreciation activities, and volunteer recruitment. An active PTO means that parents are invested in the school. Drive by the school to see if there are signs posted about upcoming fundraisers or events, or check out the website.
• School enrichment activities. A school that has high expectations of its students socially and academically and offers a range of enrichment activities to help students achieve goals is sure to draw families. Look on their website or even call the school to find out if they have accelerated classes, a gifted program, student musicals, athletic contests, or student publications.
• Strong attendance rate. If a school’s attendance rate is below average, it’s a signal that they are not engaging the students and their families effectively. To find out, you could call the school and ask for their statistics. But, it’s easier to check the school out online at GreatSchools.org. This site lists both the attendance rate and how many students transfer out of the school, based on information available from each state’s Department of Education.
• Positive environment. Most schools offer tours in the late summer or early fall after admissions have been finalized. Does the school look clean, organized, and cared-for? Are there student projects displayed and do they show engagement or even enthusiasm? Is the event well-staffed by volunteers?

With this information in hand, you can target your seller outreach with marketing tools for real estate investors to find a good deal in a school district that buyers will flock to.

Using Your Insight for Better Investments

Scouting out homes to rehabilitate in sought-after school districts has proven to be an effective strategy for my real estate investing business. Of course, as a HomeVestors® franchisee, I also have the benefit of leveraging nationwide brand recognition for advertising in specific neighborhoods. Because HomeVestors® is a household name, distressed homeowners come to me when they need to sell their property quickly. I then use the proprietary software, ValueChek™, to understand whether their home can add value to my property portfolio.

If you are interested in real estate investing or have already dabbled a bit but have not yet experienced solid results, perhaps it’s time to see about becoming a HomeVestors® franchisee too. Give them a call today to see if it’s the right fit for you.