I have a new investor/client wanting to buy rental property in a college area and rent to students. I don’t think he is prepared for this. Can anyone help with landlord pros and cons?
I have heard REIs say this can be challenging.
Jeff
i had a guy that owned a group of properties trying to sell 4 of them to me last month. the problem is, if it’s this time of year and the property is vacant, chances are pretty slim of finding good renters.
the other big con is, you’ll almost never get a long term tenant. at the most, they stay one year. if you rent to males, i’m saying this from personal experience as a former college renters, chances are you’ll have a big mess to clean up afterwards.
on the pros side, you can usually demand a pretty nice rent if you’re close to campus.
this is what i’ve found in doing research. i have shied away from buying student rentals so far, and will likely continue to do so.
It can be relatively lucrative but like cecsix said, they need to be prepared for summer vacancies, lots of turn over (“churn”) and messy college kids that may not give a crap about anyone else’s property.
My son rents a room in a house with 3 other football players…they share the common areas. The house is owned by the parents of one of the players and the boys were hand-selected from those players that expressed an interest…he pays (welll, actually he pays ‘squat’, the National Bank of Dad pays…) $350 a month, so the parents are taking in about $1050 a month and don’t have to pay for a dorm room for their son (saving about $4500)…it’s a deal for me – I pay $2800 for the 8 months vice the $4500 of a dorm room and “The Boy” is happier because well, he’s not in the dorm…
Keith
One nice thing about Student rentals is security. If the kids do trash the place you 1. Yank the deposit. 2. Sue the student. 9 times out of 10 the parents will step in and pay the bill because they don’t want their kids credit screwed up at a young age.
…even better, get the parent to co-sign the lease (which I did because I trust my son explicitly)…
Keith
lol. That’s goes without saying.
The biggest guys on the OSU campus are lawyers. 30 Mil./YR. !
They don’t play. They will sue a kid and their parents in a heart beat.
… Bastard sued me and my girlfriend at the time. We worked with them in the summer and early fall during move out/in season. Classes started back up and we could no longer put in 12 hour days. They sued us for tool rentals because the job took to long we “must have been using them on side jobs, but don’t worry you college students. You have a bright future!”
Moral: I does not pay to be in student rentals if you are a nice guy.