I'm thinking about getting into student housing rentals but I was wondering if there is a market for them? How is it compared to regular rentals.
Student rentals are extremely 'hands-on' and 'management intensive'.
You'll get to deal with both the entitled spoiled brats AND the parents who raised them this way. It can be a real time-waster and energy-drainer.
Prepare an iron-clad lease and get the parents to either sign the lease or sign a notarized Parental Guarantee. Even then, understand that the parents can, and sometimes will, sue you. Imagine your attorney telling you, "You can either settle for $2000 or retain me for $5000."
That said, I've been renting to students for a good while and if I could find another college property that would cash flow I would buy it.
That is a good question. My daughter is going away to college the year after next and i considered buying a property and renting out per room. (buy it, rehab it, add a bathroom to each bedroom)...We have been considering this for a couple of years and wondering if it would be in our best interest since the school would be 3.5 hours away from here. We thought at least it would cover her housing expenses.
What could the parents sue you for specifically? Have you been sued by parents?
Property owners are increasingly becoming targets of litigation. They, along with their insurance companies, are seen as having deep pockets. My own insurance agent once told me that they will routinely settle most claims under $5000.
Yes, I have been sued by parents. It was over a security deposit, but these days anyone can sue anyone over just about anything: black mold, ice on the walk, a dog bite, 'unsafe' conditions, coffee that's too hot -- the only limitation is imposed by some attorney's imagination.
However, I think your plan of buying a property for your daughter can be a good one, depending on many things, of course. She will learn some valuable people skills, you can pay her a management fee (start a Roth IRA for her) and so on.
If I had any advice it might be to get a qualified attorney to draw up the lease, consult your insurance agent for all needed protection (including an umbrella policy if you don't already have one), screen the roommates, and if she rents to friends she may lose them due to her 'manager' status.
Lastly, what is your exit strategy? You may not be able to sell this property for what you wish. Are you willing to become a long-term long-distance landlord in that case?
In any event best of luck, and keep us posted.
My exit strategy was to light a match when she graduates.
The plan is to buy it cheap enough & rehab and then the next child will be attending same college by force & reaping same benes as child 1. When the second one is done, then sell and that is a good long time away. kid 1 will be there about 2 years, kid 2 will be graduating HS when kid 1 graduates college. . .... I have some time ...weighing the options...teaching the girls how to fix plumbing....patch holes and install carpet....some martial arts to keep boys OFF of the property....i think 5-7 years of ownership will be good & then sell?
What do you think?
I live in a college town that has a huge student population so if you get into the rental market here, you have to deal with students. Honestly, I prefer to deal with my students than my non-students. It is a little more hands-on like Nc Mark said, and I would agree with most of what he said.
As far as an exit strategy goes, properties seem to change hands frequently in a college town, because a lot of parents are doing the same thing as you are. They will sell when their last child leaves. This is perfectly fine, but if you do have problems selling, than you can always rent it out and have a property management company take it over. This can be a great option if there is another dip in the market when it comes time to sell it. If it is a good property though, you shouldn't have any problems selling it or renting it out.
One more thing to consider about insurance, you can usually add a liablity policy to the fire policy for very reasonable cost. This will give you a little more protection against lawsuits.
Hope this helps.
I recently started investing in student housing. Student housing provides great cashflow and steady income, because the parents co-sign on the lease
If you are interested in student housing check out [REMOVED]
This guy only does student housing and I have learned a lot from him.
I just checked out that website.
As soon as I read this disclaimer --
>>Results described are not typical.<<
-- I bailed.
The web site requires a name and e-mail to get information.
Jon Holdman, Flying Phoenix LLC
No freshmen, ironclad lease, co-signers and very good background checking. I expect the college population to jump for the next few years - there's going to be buckets of government money for higher ed.
Ya, ya... but when the echo-boomers taper off in ten years or so -- who then will you rent to in your college town?
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I've been looking at buying MF apartment complexes near campus here in Houston and it seems that either the Seller is not really wanting to sell (just testing the waters, seeing what the market is throwing out) or the Seller's expectation of price is too high (low low CAP).
I know I should look at other city markets for student housing, but I haven't found too many listings (Brokers) who are in the student housing MF market. Other than mailing letters to the owners directly, it seems that there's not a huge market of listings for student housing MF opportunities.
Ideas/criticisms/suggestions/advice/pity/sarcastic remarks anyone?
Student housing is probably a good long term play. I think the comments here cover most of the major concerns. There have been some good articles about his very subject. Search money magazine, I they had a real good article on this about a year ago. Sorry I don't have the issue.
I live in a college town and it's booming, however undergrad students are brutal on apartments. You can pretty much plan on doing repairs after every turnover. You can usually get a bit more for your apartment though because they are usually rented by the bedroom per semester. So you rent one bedroom to a student for the entire semester, IE one check at move-in along with sec deposit.
I'm getting more concerned about these markets though because I have heard from multiple sources that the next bubble to break is the higher education bubble. I don't own properties in the college town but the next closest town and 70% of my tenants are grad students. I like grad students because they are usually more clean and mature, and if you get them the semester they start you can usually keep them for 3 years or so.
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