Why would a 4 plex turn over every 18 months?

Question

I've located a 4-plex I'm researching for my current area. I've got an understanding of the numbers and need to verify a few more things but I did notice on the Tax Assessor site that the property resales on average every 18 months. Its in a high rental area right next to a college, tenants are currently college students. Any ideas as to why this property turns over so quickly? After assessing many of the property management companies in the area I wouldn't be surprised if its turn over due to people not being able to manage the property effeciently.

Colleen F. · Answer

Check the vacancy on since they are likely college student rentals you may have more turnover. Also  if Colorado Springs publishes their police log you might look at it and see if there are citations at the address due to drinking etc. One or two big parties may make you more tired of landlording then you might be otherwise be and people may decide its not for them. If this area is known for partying it might explain the turnover (not saying you can't clean it up just that it might have been unexpected by previous landlords).

Aaron Helmholdt · Answer

Both above posts nailed my initial thoughts when reading your topic.  I would take that as a big red flag unless, like Michael said, there are quick gains to be made.

Michael Seeker · Answer

Is the property turning over at a higher price each time?  If it's a high demand rental area, it's possible previous owners wanted to take advantage of the gains.  If you notice the sales are all for similar prices or losses, then I'd look more closely at the details and see if there is something you missed that makes this building undesirable.

Patrick L. · Answer

A lot of people get into real estate investing not knowing what they're going to be in for.  The popular entry point seems to be 3-4 unit properties so you can still do a residential loan.  Many people figure out the returns aren't what they expected (hmmm my PITI is $2,000 and my gross rents are $3,000 so I should be making $1,000/month.....but I'm not, guess this isn't working out). Many others just don't have the stomach to deal with the drama and expenses of dealing with rental property.