When to buy student rentals?

5 Replies

I live in a good market with great potential for student housing. I have a few houses that work right now that I'm ready to put an offer in on, but i'm thinking this is the wrong time because the school year has just started and I don't want to have a house sitting empty for 11 months. So, i'm wondering if I might be able to find renters for the next semester starting in around 4 months? Or If I should buy now and try to find different renters such as families, or others which might be harder to find for a 10 month lease. I'm guessing buying in January would be optimal so I can start marketing for august and then a 7 month holding cost is just another expense? Or I can I market before I even buy a house? Any insight and wisdom would be greatly appreciated!

@Nick Seginowich Great questions! We do a lot with student housing in Ohio. 

If you're going to buy a property in the "dead" season then just factor in the vacancy and holding costs into your offer. If you get it rented sooner then all the better!

Another note, we always do year leases with the end date, the date of graduation.

Hope that helps!

Thank you Cameron, that helps a lot! 

When do you think is too late in the year to buy a house and start marketing? And do you have any insight on marketing before I even own a house... ?

Thanks you!

Know the student rent cycle for your market.  In my market students go under lease in Oct-Nov for the following fall.  It's almost time for me to start looking for students for Aug 2020-21 lease.  Fortunately it's pretty easy, put a sign in the yard and I have tons of applicants due to the great location of my property. 

I bought mine in January and it was already too late to find students. I AirBnB'ed it to get some income until I was able to get in sync with the student cycle. Luckily it worked out and the AirBnB income covered about 90% of my mortgage.

@Tim S. man I didn’t even think of Airbnb! That’s a great idea thank you, that will cut down the holding costs a lot even if I can only rent it out for a week out of the month.

@Nick Seginowich Listen to Bill Syrios Podcast #140...great introduction to student housing! 

Proximity to campus and dependency on the academic schedule are the conundrum of student housing and are very challenging to reconcile...I'm talking from little experience...but a painful one...just missed the year with my first student SFH despite all my effort to get it ready on time...had accepted offer in January...closed beginning of March...then had very hard time finding a contractor (had about 8 bid on the project)...all were very busy and most didn't even bother to follow up with bids...bottom line...be prepared to hold the place empty for months.

From your post it seem you plan to invest locally which does give you a great advantage (I'm 3 hrs away from my houses).

Couple of thoughts:

In markets where the students want to walk to campus it is very hard to strike on both timing and proximity...you need to be prepare to get places as they become available as inventory is very limited...in my market the students practically don't cross certain streets...very defined geographic area and you have to be in it (this is market specific so you need to map your market).

As Tim Simmons said the most important thing is to know your market. How big is the student body?...Undergrads or Graduates? Living only close to campus or spread around? Houses or apartment complexes? Leasing as group or individually? Dominated by big landlords or many small landlords? Expected level of finishes...and the list go on...

If there are many graduate students you might be able to get the house rented also mid year as they tend to move more and are more independent (going to fellowship in mid year...returning from research abroad etc).

Are you looking at places which need rehab? If so line your contractors ahead of time and double the time they tell you it will take to get the job done.

Good Luck!