The cheap entry does offset some of it, and it's worth being precise about how much. At $160k and $500 a bed you're at $2,000 a month gross on a four bedroom, which is a much stronger ratio than $400k for four beds at $800. What the low price buys you is room to be wrong. If you fill three beds instead of four you're still covering costs, where a thinner deal in the expensive market breaks.
What it doesn't buy you is a floor. The enrollment cliff means smaller birth cohorts reaching college age over the next several years, and the schools that lose students first are the smaller, less selective ones. A 1,800 student private college is in that group by size alone. Some of them are fine, with endowments, strong regional draw and growing programs. Some are consolidating campuses or closing. That difference is knowable before you buy, and it is the single most important thing to research here.
Things to actually look at: the college's enrollment by year for the last ten years, its acceptance rate over that period, whether the last few freshman classes came in above or below target, and its financial statements, which private nonprofits file publicly. Also ask whether the college is building dorms. A small school that adds 300 beds of its own housing can take a quarter of your market off the board in one year, and colleges do that when they're trying to make the residential experience more attractive to shrinking applicant pools. That single risk is bigger in a small town than in a city with 40,000 students.
