BiggerPockets

I just found a small house in a nearby county. It's a typical opportunity, low price, moderate rehab costs, decent rent, etc. However, I usually look at school districts when I evaluate a house and its neighborhood because I like my rentals to appeal to the lower half of middle-class families. For instance, the tenant in our San Diego condo primarily rents from us because she wants her boys to attend the schools in that district. The condo itself is of secondary importance to her.

Does anybody else look at school districts for potential rental real estate investments? What kind of experience, good or bad, have others had with a rental with less than desirable schools in the area?

Thanks for any and all inputs.

Thanks Charles. I agree the school district is a BIG selling point to families with minor children whether they're renting or buying. I'm just curious if anybody has had good luck renting out homes in poor school systems either because most of their prospective tenants don't have young children and, therefore, don't really care about the quality of the schools or simply don't care what kind of school their kids go to, which sounds to me like a tenant I don't want. Other thoughts? Anyone? Anyone? Bueller?

Are you and I the only members of the "After Midnight" club here on BP? :mrgreen:

Yes, it just depends on your market.

In Pasadena, my tenants tend to be 20-30 somethings. School district is not a consideration, since PUSD is such a mess.

However, in the neighboring cities of Arcadia, South Pasadena, etc., where school districts are a major selling point, the rentals don't make sense to buy. A unit typically sells for $250,000. No way would I be able to get rent that would justify that purchase price.

I had a tenant application from somebody with low 5xx credit, whom I declined. This applicant specifically was looking for the school district where my house was. I referred this applicant to a friend who had a house available 5 minutes away and who was willing to take that low of a credit score, but that friend's house is in a not-so-good school district; rent there was even like $300 to $400 lower per month. But that applicant didn't even want to look in that other town.

I have 2 rentals in a small inner city in NJ. The tenants are more concerned with the criminal activity in the area than the schools. That's what they've asked about when I advertised the properties - what's the neighborhood like, can their kids play outside, is it safe?

I think one or two have asked which schools are nearby, but that's a rarity. The schools there rank from bad to worse, it's not a consideration for living in a certain area.

The votes are in! Thanks for all your inputs.

What I think I'll take away here is stay away from properties in poor school districts unless the numbers are just smoking. IOW, I should be able to rent for low enough that I can attract the childless tenants that don't care about school districts, but enjoy a great deal on a rental.

Sound like a good approach? Thanks again.