Student Housing Rule of Thumb

3 Replies

We are interested in student housing investment. It is a duplex priced by the bedroom to, of course, obtain a higher monthly rental income. I have read that a rule of thumb for SFH monthly cash flow is $200/month, and multi-family, including duplex, is $100/door/month. Would you expect a higher monthly cash flow from a duplex priced by the bedroom? If so, what have you used?

Thanks. 

Student housing is frequently rented by the room, so you'll need to figure out the rate/room in your specific target area. Proximity to the school is a big factor, especially if its within walking distance.

Craigslist is a decent place to go to get an idea of rates, you could also contact the school directly as many have housing sites that you can post on.

That's great that you are looking at the end result and trying to work backwards to get that result but market rents for the area will dictate what you will be able to get. you would have have to start from your profit, work backwards through your expenses and figure out how much you should be paying for the property. If you can find the property at the right price with the right gross income to achieve your final net Income that would be great. there is no "standard" of what you should make, whether its a SFH or a 2FH. if you can make a profit, that is great, if for now the property breaks even, that's not bad either, that means it is being paid for by your tenants while the equity builds and that's happening without your money and most likely tax free ( especially if you keep it for your relatives to inherit). so do not feel you have to follow a specific "Rule".

Jacob - do you think that searching Craigslist this late in student lease up season would be an accurate assessment of the expected rates for the area? I’m curious as we have searched for other student housing in the area and would think any current availability would offer lower rates to pull in someone (anyone?) this far into the semester.