College rentals are they worth it?

General Real Estate Investing
1

Hi all :slight_smile:

I was just wondering if you all think that buying properties that are close to a college campus and renting them to students is worth it? It seems like you would get higher rent, have good occpancy, and payment would most likely be received bc mom and dad are usualy paying. Bad side is you have to worry about it being trashed, but then again students will live in anything. Any thoughts?

Thanks,

Jutah

2

Some investors are successful in renting to students. I own a 5 unit place 1/2 block from a college. I do not rent to students due to the many problems I have had over the years.

Charlie

3

What about the 3 months of vacancy during the summer months when everyone is back home with their parents? Better figure that into your plan when you run the numbers.

4

San Marcos and Austin are good college towns. Some people don’t like renting to students, but that’s being very general. Each renter must meet our standards regardless of their profession. In Austin, we have laws against discriminating based on “occupational status”, so putting “no students” in your ads will bring a lawsuit.

I rent to students and have not had problems. We screen them the same as anyone else. I wouldn’t mind renting to section 8 or low income folks either as long as they passed the background checks and put up the required deposits. I use a property manager now, but they follow the same rules of thumb that I did. I would rather have a vacant unit than get desperate and take a lower deposit or put a bad tenant in my property.

[i]Fair Housing Program

The Fair Housing Program (FHP) helps any person in the Austin metropolitan area who has been discriminated against in the rental, sale, financing or appraisal of housing. It is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status, or national origin. In the City of Austin, it is also illegal to discriminate against any person because of marital status, sexual orientation, age, or status as a student. [/i]

http://www.housing-rights.org/programs_and_services.html

5

Maybe you can talk to the school about leasing the space. In our area, the schools have problems providing enough housing for their growing attendance. Since they are located in large urban areas, lack of available land and building sites inhibit the schools from building additional housing. It is the case that all the major schools in our area have given notice to upper classroom that on campus housing will not be available.

We have had great success leasing entire rental buildings back to the school which they in turn manage and maintain. It has been very profitable for us.

6

I can see that being great if they are maintaining it, seems like you just sit back and cash the checks.

7

Pretty much. Some buildings we rent and maintain ourselves but we have a few larger ones we contracted with the housing departments and they operate and maintain as if they would their own housing.
They are long term leases as their housing needs are increasing each year and they are grateful to lock up the buildings on the long term.

8

It’s not illegal in this area and I know other people who don’t rent to students but of course aren’t going to put that in their ad. They reject them based on the fact that they don’t make enough income to qualify for the apartment. On that basis, it has nothing to do with the fact that they’re students. Not having enough income is a legit reason to deny anyone an apartment.

Oh and someone else also had a rule where they don’t rent to lawyers. The lawyer sued and lost. The courts found that lawyers weren’t a protected class and the owner did have a legitimate reason for not wanting to rent to lawyers because of increased business costs, in this case the lawsuit.

9

Thanks all for the input :slight_smile:

Do you all make them sign year leases? When I was in school and rented a house they made me sign a year lease. Also what is the usual fee for having a managment company handle stuff?

Thanks,

Jutah

10

Not renting to students is not illegal in most areas. I don’t know of any other area besides Austin.

On the lawyer post…I made that one. I think I read it in the “Landlording” book or heard someone tell us the story.