I go to school at Arizona State University and live in Tempe, Arizona. A great population of students live in houses surrounding the campus and I would like to purchase a house that I would rent out to students or families in Tempe. The problem is I am very new in the RE game and need advice and tips on this kind of strategy. I would like to get started near the end of the upcoming school year (May 2015) giving me plenty of time to plan and develop some capital.
If anyone has experience in this type of REI please share your experiences and/or advice.
It's a great area to invest in. I'd recommend buying something you plan to live in with a couple of roommates, but also make sure you can afford all expenses by yourself if you don't have any roommates for a period of time.
3 bed/2bath homes West of campus (usually past Hardy) can be found for under 200k, but will generally be a bit outdated and need some work. Depending on your budget, you might also want to consider some of the more affordable condos towards the lake between University and Rio Salado.
Having done this same plan while at ASU, I will caution you that buying and managing a rental while still young and in college is more work than you might expect. You also might feel torn between having a good time, and keeping your asset (house) in as nice shape as possible.
Student housing has it's UPS and downs. The big up is that you have a guaranteed renter base as long as the school is around. You can sometimes get above market rates because you have an audience that *must* have housing, and let's face it students are not always the most forward looking people as they are still learning, and you will have kids show up day 1 without a place to live scrambling for a place. There is usually an undersupply of student housing around any popular university.
The downside is that students can be rather harsh on real estate. So think durable when you renovate or harden your property for the high energy lifestyle that students tend to bring. Think tile and concrete. If you can safely play racquetball in the living room, it's probably ready for students.
There are many threads on doing the numbers, and I would second Ryan Swan's recommendation about time management. The best bet to start is to own a house that you rent a few rooms out, so you are there to monitor.
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