Hi Folks-
I am considering investing in rental properties that cater to college students and was wondering if anyone would offer an opinion on the peculiarities of this niche.
Thanks
It can be profitable if you can stand the churn and the potential damage…get mommy and daddy signatures as co-signers and a decent depost!
Keith
Keith-
Points taken. I figure I’m looking at a pre-leasing period through each summer while making repairs (really an extended make-ready of the entire property) for the next fall/spring semester. NOI will have to cover the off-season. I guess if you do the math and know what you need to cover that, it shouldn’t be too bad, right?
If I have parent co-signers, what’s the process like when you do get a bad egg that trashes a unit. How does one go about getting the parents to pony up for damages? What restrictions apply re: keeping a deposit? Is the process somehow different from the landlord restrictions with a non-student tenant?
<<If I have parent co-signers, what’s the process like when you do get a bad egg that trashes a unit. How does one go about getting the parents to pony up for damages? What restrictions apply re: keeping a deposit? Is the process somehow different from the landlord restrictions with a non-student tenant?>>
A strong lease and a good deposit are the keys. Keeping a deposit (what you can keep and what you cannot) is, in all likelihood, governed by your states’ landlording laws. Generally speaking, you can make them pay for damages but not for “fair, wear, and tear”…worn dirty carpets and walls needing paint are usually fair, wear, and tear. Holes in the walls, slashed drapes, ripped up carpets, damaged appliances, etc. are damages.
Getting a strong deposit will allow you to pay for the worst of any damages. Also, be aware that the amount of damages may be controlled by the landlord laws also. Take “before” photos and/or videos to show condition.
Keith
I’m curious, I’m an assistant in a Real Estate Agency in New York, we are currently representing and trying to sell 902-908 Bedford Avenue in Brooklyn, New York. It comprises of 3 buildings and 44 units total and designated for Student and Faculty Housing Only… Who might be interested in a property like this?
You can find more information at: www.peterashe.com/commercial/902bedford/
Thank you for the feedback.
verdant1,
Big picture: I think, and census data supports that student populations are one of the fastest growing segments of the population…due to baby boomers’ kids now entering school. I am actively building condo projects and seeking out properties near colleges and universities in my area. I think it is a good way to go. I do not own any rentals currently in that cater to the college kids. One of the last properties I purchased is located 2 blocks from a private university in which the student population grew significantly over the past few years. Good luck with your investing.
bluechipdc-
You’re buying properties by the university in your city but not as student housing? Who is your target tenant market? Maybe you’re not renting at all (condo conversions or something else entirely?)
I’m in Austin and am thinking of investing in the UT area. There are bungalow-style flop houses and garden apts here that I believe will rent out easily.
There is a lot of MFH razing / rebuilding starting up in this area (its apparently been sleepy for years). The city is encouraging higher density development (rezoning for max height, etc) so getting in the path of that renovation seems like a workable strategy.
On the flip side, all this new class A MFH space coming on line down there within the next few years will increase competitive pressures. Still they will all be requiring premium rents.
Other than that, there is the UT bus system which widens the farm area quite a bit.