Is student housing worth it? I think so!!
K pasa multi family investors!
So after diligently searching the Myrtle Beach SC area for a decent deal I finally came across one in the most unlikely of places....
I analyzed and visited 12 properties before finally circling back to a listing my agent had compiled and put at the very bottom of my multi-family housing search.
This small community about 20 or so duplex's are strictly student housing. And when I went to Coastal Carolina University, they were party central. I mean, it was like spring break in Cancun every Tuesday, Thursday, Friday, and Saturday. WILD!
Why did I choose it? I was riding around one morning after finishing up completing a wholesale on a SFH when I decided to cruise through the area. I came upon a kid sitting on the patio out front and asked him what he paid for the place each month? His replied "bout $500 bucks dude"
Me, "really? For the whole side?"
College dude, "naaa man, I wish, thats what I pay for my room"
Me (to myself) "holy smokes!"
College dude, "Yaa its sweet bro, its a steal compared to what my other buddies are paying for crappy rooms in Campus Walk (a huge student housing complex).
After hearing this, I had to take a closer look!
So here are the numbers for both sides per year:
Purchase price: $230K
GSR: $35,640
Repairs and Maintenance: $2915
Utilities: $3265
Taxes: $2220
Insurance: $2500
MGMT Fees (although I am tackling this myself): $2851
Replacement Reserve: $1000 (for replacement of appliances
NOI: $19,463
Expected Monthly Cash Flow: $450
Of course I wish I would have gotten it for less, but with an average vacancy rate in this small community running around 4% or lower for the past decade, and with comps' based on the same product selling for $256k, $249k, & $272k, I thought it was a good buy.
Please guys let me know what you think! All comments are welcome! Here to learn.