If so, what do you do with the units during the 3 summer months?
Thanks,
Kip
I’d assume you would have to be able to cashflow with 3-4 months vacancy and factor that all into your max offer.
i only do 12 mn (actually 11.5 mn) leases, but its std for the area
How does that work out when you have a student that comes into the area in Sept for school and leaves town late May and stops paying the rent? Or do you only rent to local students that won’t be leaving the area for the summer?
Rich,
Typically unless you are renting to freshman most of the time not everyone will be moving out of the house during the summer. My sister goes to Ohio State and she will be living in Columbus through the summer. I grew up in a college town and there were always students around. I would guess that the closer you are to the school the better off you will be. I did a loan for a guy in College Station (Texas A&M) last year and he said he makes a killing renting to students. He also said he makes all the parents co-sign and qualify for the rental as well as the student. That way if anything gets damaged the parents are responsible as well as the student.
That’s a good idea on bringing the parents into it. I imagine students are abusive on the properties but probably no more than low income people. Do LLs renting to students generally charge higher, lower or about the same compared to market rents? Is there a premium to be had? Is it possible to get higher rents if there are maybe 3-4 people sharing an apartment?
My customer charged by the room UNLESS he had three or four people come to him at the same time to rent a house. He would just advertise room for rent around campus and then he could charge each person a premium room rent instead of a flat fee for the house. You definetly have to have the parents as a back-up. When I was in college at CU I had some frat bros who messed up a house so bad that the local news did a story on them. They did a midnight move and disappeared for the summer and they had TRASHED this place. They were a couple of years ahead of me.
When I was in college I had to rent a place in May so that it would be available for the fall.
I’ve recently gotten interested in the rental market at some nearby college towns. No personal experience yet but I have a friend who is doing very well withy it.
See here in San Diego, it would probably work. UCSD is in La Jolla. It’s not hard to find someone to fill summer rentals in an affluent beach town. Plus when the horse racing starts in Del Mar, you can’t find a rental anywhere. You can make a lot of money renting for those six weeks that the races are here.
Hey Ask… How does that work?
I guess the kids would be able to leave their stuff there over the summer. That might be an advantage, especially if your apts were not furnished. It would be a pain to have to move and store a bed and desk, etc for 3 months, then move it all back.
How do your rates compare to the “street” rates for regular 12-mo. apt leases?
Thanks!
Kip
Maybe I’ll do that up by UCONN…
I’ve also heard of students paying a reduced rate during the summer so they don’t have to move.
Actually, I became fascinated with real estate when I was in college. Our house/building was 6 units, 4 bedrooms each. Rents were $300/month per room. 9 months of occupancy gave an annual income of $64,800. With this scenario, 3 months of vacancy doesn’t really matter. It was a decent place and most of the units were rented to girls…landlord was smart. He made a killing on the place and used the 3 months vacancy to clean it up for the next school year.
The best way to analyze rents and determine market is by checking the dorm charges. Depending on the school, a lot of people would rather pay for a house than live under watchful eye. This application would require a college town (town living off of the college student’s discretionary spending).
Get a decent security deposit with each student listed on the lease. If one bails the others are responsible. Target girls and your place will stay undamaged. Target guys like me and you’ll have parties quite frequently.
Good Luck!
Good idea in theory targeting girls…but lets not forget the fair housing laws.