ALot of the rentals I have been looking at are in college areas around the City of Baltimore. I have been looking in these areas because they are college areas, but also because they are very stable areas. I feel that these two factors would give me a stable rental base.
Does anyone have any advice on buying/renting in college markets?
I live in Milwaukee. It’s ridiculously expensive to buy any rental property even remotely close to the big public university (University of Wisconsin-Milwaukee), and relatively inexpensive to buy it close to Marquette (A private, much more expensive college to attend). Marquette is much, much smaller in size, so perhaps that’s the reason.
I used to be a general contractor for a rather large investor here and he had numerous properties in the expensive UWM location. The good news is that the incoming cash was awesome, almost twice the income in other parts of the city. 3 bedroom places go from $1250 on up.
Downside was that there aren’t any “long term” tenants. The very longest you can hope for is a year, and summers can be like a boon town as all the students are gone. The best investors in these areas were able to lease out their properties over 6 months in advance.
Screening is also important (it should be for any property). Nothing quite like 3 or 4 18 year old males throwing keg parties 3 nights a week to destroy your house. As for the leases, he’d often times have the parents of the youths “co-sign”, as they didnt have rental history to begin with. This is a great idea if you can pull it off, as you’re almost assured to get the rent money. If you cannot get a co-signer on the lease another popular tactic is a double security deposit. Most of these students pay their rent with some type of loan, so they tend to spend the money freely.
Overall, it seems like a good deal, as these houses seem to appreciate faster than the rest of the city due to continuous tuition increases. This is probably because rents in these areas seem to climb at the same rate as the tuition hikes, which have been large the past few years.