New and looking to invest in long term rentals

9 Replies

Hello, I thought I'd post and say hi and introduce myself. My wife and I are brand new to rentals and almost new to real estate in general. I'm 30 and graduated with my DPT 5 years ago, my wife has degrees in graphics design and english and is working at a newspaper currently.

We are currently finishing up a DIY remodel we have been working on for around two years (We have done probably 80% ourselves and almost all of the finish work). We bought a house in WV to live in, in a very nice neighborhood (dead end road) that needed a LOT of work (1973 with minimal updates). We've almost finished the reno, but life changes and I am now looking at a new job in Bloomington, IN to be closer to my parents in MI and my mother-in-law in IL. Bloomington has IU's core campus, so that's around 54k+ students. My parents and grandparents have owned rentals, so I've seen some of the ideas from the outside.

 I've been reading a lot and have seriously considered investing in long term rental properties in Bloomington area. We bought our home maybe 15% below market value. It had old styles and worn, but liveable with new carpet, but we have redone everything (kitchen, bath, doors, hardwood floor, all light fixtures and outlets, and finished basement). We should have a good bit of equity built up in the house since I hope we have increased the value at least 40-50% from what we bought it for since it had a partially finished basement and it made it from 3/1.5 to 4/2. We also got a 15 year loan at 2.75%, which I will hate to payoff actually! So we should be set for any down payment we need to make on a couple properties I believe.

My current plan is to start with the 'house hacking' I've been reading about and buy a 2-4 plex and rent the rest out. Also, my wife has always been interested in real estate and had thought about going into that field in the past, but our area in WV wasn't were we wanted to settle down long term, so she never pursued that. So we are looking into getting her real estate license in IN. So I figure that is a good start... get a owner occupied rental and get my wife into real estate and see were life goes.  We are lucky enough that I make over 100k/year, and we have paid down 80% of our student loans since we graduated 5 years ago, so we have a lot of extra income and should be able to afford 20% down payments on properties fairly quickly if we really start investing.

Anyone have any suggestions for college towns? I've read about buying houses with 4-5 bedrooms and renting out by the room, either fully furnished or bare, which should work well in Bloomington area.

I don't have specific college towns to suggest.  What I do have is a suggestion of making sure you check the rental laws in any of the college towns you are considering.  There are many with a law that only allow you to rent to 2, sometimes 3 adults with different last names.  So getting a group of 4-6 college friends together to share a house becomes an impossibility.  A truly stupid and outdated law, imho, and annoying as well.  [sorry, that bitter sound was supposed to stay in my head]

You are correct for looking at those types of housing - and there is a forum about short term and vacation rentals where some of this is spoken about as well.  Glad you are jumping in!

@Andrew Meyer

Welcome to Bigger Pockets. BP is full of resources. You will find resources here from blogs to pod casts and forums. You can also send messages to members which is my favorite part of the website.

@Lois Stern

Thank you for mention that, I wasn't aware of that. I check and Bloomington has a 3 person limit, although owner occupation is exempt I believe.

A few colleges in my area started limiting when students can move off campus...like not till they're juniors or seniors...in prior years freshman, or at least sophomores, could live wherever they wanted....just something to consider...

Hey @Andrew Meyer ! My wife and I have a similar story! We had a live in rehab in Fort Wayne and just moved to Bloomington last year. I have been searching for multi's and the pickings are a bit slim but have been able to locate a few good options that we are looking to pursue as an owner occupant. Would love to connect in person sometime, I have not been able to find any REI associations down here!

Originally posted by @Thomas Landis :

Hey @Andrew Meyer! My wife and I have a similar story! We had a live in rehab in Fort Wayne and just moved to Bloomington last year. I have been searching for multi's and the pickings are a bit slim but have been able to locate a few good options that we are looking to pursue as an owner occupant. Would love to connect in person sometime, I have not been able to find any REI associations down here!

Sounds good, will definitely have to get together. We know 1 other couple from a church we visited, but we don't know another soul (Except the tire people at sam's club from the blow out I had when we went there lol) I'm a little surprised about not being a lot of multiplexes with the university, but maybe they just aren't on the market? 

That's quite possible, people don't want to let go of the ones they have.

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