Anyone familar with Doug Fath and his Student Housing Investment Program?
No but its prob the same thing as Nick Sidoti’s stuff
Given that he would not discuss funding my deal (which more than met his threshold) unless I paid for his course, I would say he only makes his money selling education rather than funding deals. My guess is that he sets his investment thresholds so high, most deals will fall short - giving him his out. There was no reason to turn me down as I offered to pay to for the course after the funding was secured. There was absolutely no risk to him, yet he walked away from it. Yes, I have been dealing with students for the last 15 years.
Since you have dealt with student housing for the past 15 years I would be very interested in hearing a little about your experiences.
I have a fully-furnished homes rental business and have been doing this for 6 years. The market in my town is for traveling workers, snowbirds, and people displaced by divorce, fire, floods or remodeling.
I don’t see a large student market here, but then again we are currently housing a Fire Academy student and an Airport Controller trainee. And I have just had an inquiry from a Nail Salon Academy owner about housing her out-of-town students.
How to do student housing profitably would probably interest other landlords near universities. It definitely interests me. Will you share with us?
First I do consider my RE situation to be fortunate as we did not intend on targeting students when we bought the place. It was more that the students discovered us and I learned about the benefits over time. The factors that make my situation desirable are 1) my location - two blocks from the grocery store and one block from the college 2) slightly more demand for rentals than supply in this small town 3) condition of the property - I make sure I would want to live there. 4) my amenities - off street parking, W/D/DW, most of the rooms are large, some furnishings 5) upper echelon college. These factors allow me to receive a higher rent from students than the public. 6) their friends call me by Christmas and sign the lease 4+ months in advance.
The downside: 1) students can be hard on the place, but that is what the security deposit is about. I have addressed the year end cleaning issue recently by pushing the rent up $200 pa and I will send the cleaners in at the end of the lease. That way I know the place will be cleaned up to spec and on time - I only have one day between check out and check in. As side note, athletes have been harder on the place than others. Thus, I screen them out 2) students stay no more than 2 years, but see num 6. 3) some noise issues, clutter issues.
Would I find the same situation in every college town - no. But with RE prices deflating, there should be more opportunities in the future. If the numbers make sense (rent - mortgage, taxes, insurance), then one must weigh the differences between renting to students versus the public. I suspect it comes down to how uptight landlords are about how their property is used.
I have found it to be a good niche. I would build another house as my lot is big enough to do so, but the banks said they are more concerned about W2 income then high equity (50); rent coverage (2:1); build cost less than mkt value. I even offered the banker nine percent and they said no.
I broke the post up because it kept saying “not acceptable” every time I went to post. It looks like numbers are censored in this forum, which is very annoying.
I think they are having trouble with the format, normally length is not censured.
Is this 1 house that you have, with individual rooms rented to students? Is it a complex? Do you pay utilities? Do you furnish the units? Do you get semester or annual leases? How much security deposits? Do you rent to freshmen? How many student tenants do you have? Do you have parents sign the leases?
I see a HUGE market in student rentals, now that I have been on the other end as a parent. I was so appalled at the unsafe conditions of some off-campus student housing–non-locking windows, no smoke detectors, black mold from leaking swamp coolers–that we ended up buying a house instead.
Thanks for anything you want to share.
Thanks for your PM. I tried to email you back, but that system wasn’t working.
So you rent out 7 bedrooms in the duplex, 1 year lease, each student pays rent plus utilities, partially furnished.
Do the students know each other, or are they strangers?
What furniture/appliances do you supply?
I agree that there is a difference in low level tuition vs mid-level. I’ll take your word on the high cost tuition schools. In some towns there is a huge, constant tenant base for student rentals. A good cow to milk.
You can post the complete message if you would like. I was receiving all kind of errors and figured it was easier to email you than to mess about with the forum board.
The students know each other. Washer/dryer, kitchen appliances and items, dressers.
My guess is that if the students did not know each or did not sign a lease together, an argument could be made that you are running a boarding house.
Now the trick is finding the financing, the search continues.
Thanks for the info. on student rentals. Students are a guaranteed tenant pool around any university or college.
Students’ parents are made very happy by a solid, safe rental house. Even happier if it is furnished with washer, dryer, refrigerator, dishwasher.
The week prior to school starting the thrift stores were full of parents like us looking for sturdy desks, beds, tables, dressers.
I would have happily paid more for a house furnished with those basic things, like a student dorm room.
A furnished student house brings in extra rent. A student landlord also has extra problems with parties, noise, drinking. Students will be students.
my business is 100% student housing - I could give you some numbers nationally that would blow your mind
there are at least 2 student housing companies w/ market caps of over a billion - big time businesses
I don’t see a more captive, local pool of potential tenants and anything better than having properties located next to major universities - doesn’t get any easier than that
I would sure like to hear your experiences about student housing.
msneachta mentioned the big differences between an expensive, upper-level university and a mid-level university. Affluent parents were willing to pay more.
I am experienced with rents at a LOW level university, one of the lowest cost in the nation. Housing costs there are also low, and there is a great demand for decent student housing.
Anybody doing FURNISHED student housing, too, please share–annual leases or school year? utilities included? what furnishings?
The #1 myth that I hear about my business is that everyone thinks of the business as Animal House, and it simply isn’t like that anymore. Students have become much more demanding and finicky when it comes to wanting things like amenities (w/d, d/w, a/c, parking, tanning beds, fitness areas, etc etc)
I would tend to agree with this but I’m not so sure it has to do with income classes but rather the cost of living that more affluent parents have become accustom to. For example, my office is literally located across the street from a BCS college w/ about 30k enrollment. However, the state as a whole is generally considered a “poor” state. Almost 1/2 the enrollment of said school comes from the NY/NJ area. Let’s say rent is $500/mth, that may sound like a lot to a local kid but to Mom/Dad in NY that is an absolute steal. That’s the major difference I see.
I would guess that about 1/2 of all inventory is unfurnished and 1/2 is furnished. The older housing stock typically comes unfurnished (the Animal House buildings). Whereas the newer student housing communities being built on the fringe of college towns are usually coming furnished. I have also seen recently that these companies are offering a “furnished package” whereas they will lease furniture to the students and make money that way as well - interesting but I haven’t tried it myself…yet!
Lastly, our leases go from May-May to conincide w/ the school year which runs from Aug-May. Yes, we lease the apts for the summer months even if the resident is not here. However, I have heard that other college towns only do 9 month leases, I think that is more based on the norm rather than an industry standard.
hope this helps
Thanks for your response. The extra profit I see is that a 3-bedroom house that might rent for $900, say, could be rented for $1500. It just takes 3 roommate students each at $500.
We have been dealing with off-campus student housing, as parents, for the last 5 years as our daughter and son would not live in the dorms after the first year.
Now our daughter and son both bought homes near their colleges and have become landlords themselves.
Someone mentioned that they excluded student athletes as being too rough on the property.
That reminded me of my college days where I once attended an “Eviction Party” held by some college football students. One beefy football player had tackled the kitchen wall to see if he could actually go through drywall into the bedroom. He could. He did.
So then the footballers just wallpapered over both sides of the wall, even though they didn’t repair the drywall. Everyone at the party was told “Don’t lean against the wall!”
I agree that students can be VERY rough on a house. I bought a house near the college I was attending and would frequently hear about that being the place to be on friday night…I would cringe because I didn’t want the students to know it was my house (because I figured they would definitely try to take advantage of me)
I have fears with student rentals and maybe you guys do something to mitigate:
How do you “insure” the tenants are locked in for the full year and don’t break the lease mid-way through? (Because my house is located in a 95% student housing area, it is nearly impossible to find tenants mid school year and therefore rent would be lost for 6 months)
How liable are parents even when “co-signor” forms are signed? Is there anything else that could be done to further obligate rent payment? (Such as lease spelling out strict timelines for delinquent rent or breaking of lease and the future repercussions to co-signors)
I have heard of having a monthly cleaning service go to the house and do a few basics, maybe bathrooms or kitchen, and having the cleaning service report back on any obvious issues with the house such as holes in the walls, water damage from moronic behavior, etc…is this a good idea?
Sorry, i have no any knowledge about Doug Fath Student Housing. Please tell me something more about it because i am new in Real estate.
I agree that student tenants can be rough on rental housing.
As a landlord, you would need to be extremely tough as to your lease and enforcing it. Get Propertymanager’s book :“I Minute to Rental Property Riches”, I’m not sure of the exact title. I leant mine out and it didn’t return.
When our daughter and roommates rented a student apartment near UC Irvine all 6 parents and the students had to sign the lease. There was no question that the property management would enforce every part of the contract. They did credit checks on everyone as well.
If you just search under Google for “Doug Fath Student Housing” you will find it.