I'm just getting into real estate and I'm trying to do student rentals as well as house hack. I'm starting my freshman year in college and the best look property in my area is a $130,000 duplex that rents out for 1,350 monthly, the owner pays utilities, and has a detached garage. Each apartment has three bedrooms and one bathroom and to room at my college is about $600 a month not including food. Would it be a good idea for me to buy this property and try to have students pay $300-$400 monthly per room then eventually turn the garage into a studio apartment? I also would have to figure out how to get the current tenants out to make room for the students.
@Nathan Atkinson One thing you will want to keep in mind with student tenants will be the term of the lease. Will you be allowing them to sign 10 month leases to mirror the school year or are you going to lock them in to 12 month terms and they will have to either pay the summer months or find a sub-tenant? Will you even allow for subleases?
I had a client 2 years ago wanting to do something very similar. He was a recent college grad and wanted to rent to his younger brother and other college students. Duplexes were few and far between in the area where we were looking but I was able to find him 5 bedroom, 3 bathroom SFH that was move in ready and had plenty of driveway/garage parking to accommodate tenants.
I would give leases to mirror the school year. Hopefully, I would be able to get one or students in the summer months to pay off the mortgage, if not I could save 10% for vacancy instead of 5%.
Also with students, be aware that they typically do not take care of things so be sure to account for damages, make sure they have a guarantor and are you going to require renters insurance?