Student-style rental in a non-college town?

Question

Hi everyone,

I'm not sure what the general term is for the rental strategy of renting out individual bedrooms (long-term, not VRBO) in a single-family home. Student housing is usually what I hear these rental types called but my market has no college so there are no students. Does a rental strategy like this work in a student-less market?

My instinct is no, but I hope I am wrong because if it were possible it would make a lot more of the properties in my market make sense from a numbers standpoint.

Curious on your thoughts!

Matt Onofrio · Answer

@Travis Daudelin

Hi Travis, I do this in Rochester and know 3 others who do. It works very well. Posting on Mayo classifieds is the highest conversion rate to acquire tenants. It’s also nice because they are generally good quality tenants if they are Mayo employees. All 4 of the tenants in my house are Mayo staff or students. Feel free to contact me with any questions. I actually have a fully leased property that I could sell you if interested. Total rent is $2,500 and purchase price would be 250k in a great neighborhood. I use Cozy which is an online program to have rent directly deposited and management is very simple. Thanks, Matt

Travis Daudelin · Answer

Thanks for the thorough answer Aaron! It's interesting that you called out nurses/doctors as my market is a hospital-town (Rochester, MN). I'll have to look into that further.

Aaron H. · Answer

Entirely market specific. The question is whether you have demand for that product amongst the tenant base in your area. Maybe you don't have students - do you have lots of short-term shift workers? Miners, oil and gas workers, etc.? Or something like a large base of traveling nurses/doctors that need simple accomodations on a shorter-term lease? Or is your area so desirable that people will pay ludicrous amounts for literally any accomodation (think Manhattan, Bay Area, etc.)?

Most people wouldn't choose to rent a single bedroom if they have other options at an affordable price point. So it's not going to work very well in most markets. If you're filling a specific niche where you can validate strong demand, then it can work.