BiggerPockets

Student rentals are extremely 'hands-on' and 'management intensive'.

You'll get to deal with both the entitled spoiled brats AND the parents who raised them this way. It can be a real time-waster and energy-drainer.

Prepare an iron-clad lease and get the parents to either sign the lease or sign a notarized Parental Guarantee. Even then, understand that the parents can, and sometimes will, sue you. Imagine your attorney telling you, "You can either settle for $2000 or retain me for $5000."

That said, I've been renting to students for a good while and if I could find another college property that would cash flow I would buy it.

Property owners are increasingly becoming targets of litigation. They, along with their insurance companies, are seen as having deep pockets. My own insurance agent once told me that they will routinely settle most claims under $5000.

Yes, I have been sued by parents. It was over a security deposit, but these days anyone can sue anyone over just about anything: black mold, ice on the walk, a dog bite, 'unsafe' conditions, coffee that's too hot -- the only limitation is imposed by some attorney's imagination.

However, I think your plan of buying a property for your daughter can be a good one, depending on many things, of course. She will learn some valuable people skills, you can pay her a management fee (start a Roth IRA for her) and so on.

If I had any advice it might be to get a qualified attorney to draw up the lease, consult your insurance agent for all needed protection (including an umbrella policy if you don't already have one), screen the roommates, and if she rents to friends she may lose them due to her 'manager' status.

Lastly, what is your exit strategy? You may not be able to sell this property for what you wish. Are you willing to become a long-term long-distance landlord in that case?

In any event best of luck, and keep us posted.

I live in a college town that has a huge student population so if you get into the rental market here, you have to deal with students. Honestly, I prefer to deal with my students than my non-students. It is a little more hands-on like Nc Mark said, and I would agree with most of what he said.

As far as an exit strategy goes, properties seem to change hands frequently in a college town, because a lot of parents are doing the same thing as you are. They will sell when their last child leaves. This is perfectly fine, but if you do have problems selling, than you can always rent it out and have a property management company take it over. This can be a great option if there is another dip in the market when it comes time to sell it. If it is a good property though, you shouldn't have any problems selling it or renting it out.

One more thing to consider about insurance, you can usually add a liablity policy to the fire policy for very reasonable cost. This will give you a little more protection against lawsuits.

Hope this helps.

John Sally:

I just checked out that website.

As soon as I read this disclaimer --

>>Results described are not typical.<<

-- I bailed.

No freshmen, ironclad lease, co-signers and very good background checking. I expect the college population to jump for the next few years - there's going to be buckets of government money for higher ed.

Student housing is probably a good long term play. I think the comments here cover most of the major concerns. There have been some good articles about his very subject. Search money magazine, I they had a real good article on this about a year ago. Sorry I don't have the issue.