Advice on real estate investment?

I live in a major college town in which real estate within walking distance of campus is very valuble. The housing slump does not have seem to hit this area very hard considering enrollment in school has not dropped. I have an opportunity to purchase a condo for 175K close to campus that will sell after construction for 200K (in a perfect world) and prop value (according to agent) is increasing 5% year. The problem I see is is that my mortgage with all included is about 1400/month and if I decided to move out I dont think I could ever get a tenant to pay 1400/month-perhaps 1000 at best in the near future. Is this still a good investment given the prop value increase or should I go for something further from campus at a lower price that I know would be able to rent for close to the mortgage should I decide to get something better in a few years for myself to move into?

Having managed rental property for thirty years, I have yet to see any condo situation that lends itself to being a rental. All of the properties that we managed that were condos were a pain in the pocket book and elsewhere, either due to the community environment, or the HO association, or the lack of tenants who were motivated to part with enough money.

The contributing aspect of the college town is not to my mind a plus. We are talking about a seasonal tenant base, that will surprise you most when it hurts you the most.

If you are driven to own a rental property in this environment, seek out a multiple unit property, live in one, and share the potential risk of a vacancy with the other one or two units that hopefully will not be vacant the month you decide to leave town. Also no HO association, and you get to have control over the costs and maintenance issues. If you leave, hand the keys to a management firm and list it for sale if you need to, on your way out of town. If you go this route, get a landlord mentor from the get-go; don't wing it on your own.

If you need a place of your own, alone, then seek out a cute, modest, highly marketable single family house in the area, close enough to bike or walk, or bus, and enjoy the experience mowing the lawn and raking the leaves. You will still be ahead.

Best wishes.

Rogers Smith