My name is Matt and I am currently a Junior at Quinnipiac University and an aspiring CPA. I am looking into buying a 3 or 4 single family home to rent out to Quinnipiac Students. I have read a number of books and have a parter to back me financially. I have come across a few good deals but I am struggle as to when the best time to buy is and if I should pull the trigger. Being a student I know the desired areas and the times students sign leases for the following school year. Usually students looking to live off campus sign a lease that starts in June and goes till the following May between the months of September and January. That said if I got a property within that time frame I know I could easily find a tenant but it would sit vacant for 5+ months. If anyone has insight on college rentals and when the best time to purchase a property to limit the vacancy cost I would greatly appreciate the insight. Thanks in advance :)
Check out podcast #140 with Bill Syrios.
He has some good insights for student housing. In particular, he talks about marketing timing for student housing heavily depends on how the University's housing contracts are structured. (ie some universities asks current students to renew their lease as soon as January for next school year's living arrangements)
In addition, you might want to research on the city's zoning code on student housing; most cities restrict the number of unrelated individuals living under the same dwelling, but allow for more if qualified for student housing. (ie you can only rent out the house to 3 people normally but can rent out to 4 if the house qualifies for student housing) I dont know much about the timing required to get that qualification from the cities but perhaps someone in this forum might know.
Just to clarify a bit more, when you market your property for lease to students depends heavily on other competing products out there in the market tailored to those same students. So if you are competing against the university's campus housing, you should find out the university's campus housing timing on renewing leases so that you may compete appropriately.
Thank you for your insight I have looked into the city's zoning code on student housing and learned some laws about housing college student (only can be a max of four and you need a permit). I will definitely check out podcast episode #140. Also looking into the school leases and the timing of them is a great idea that I did not think of thank you!
Matthew, the most important element is controlling the contract and keeping the ability to show the space to prospective tenants during that time. Given how early students sign in advance of the next school year, I’ve signed leases prior to closing on a deal — leases contingent upon closing. Then, push closing back as much as Seller will allow while providing enough time (with buffer) to renovate as needed and prepare occupancy for the incoming lease group.
Each campus, especially w/i NJ-NY-CT-PA region, have defined areas where one block too far will bust your business plan. I don’t stress so much on a few month’s vacancy in year 1. The hardest part is getting a deal in a true student housing neighborhood — one that the city allows via permits if needed, that neighbors won’t be a constant source of complaints, and where you’ll keep 100% occupancy through the year...which is typical for these assets. Therefore, an initial 3 or 6 month vacancy gets made up for if the property is managed well throughout the years.
I’m located in Hoboken and have looked at the Quinnipiac market. Have owned and managed student housing at 4 Universities in the region for 15 years. Happy to consult as needed.
I really appreciate your advice! I like the leases contingent upon closing but I am assuming I have to have a track record for students to trust me before I pursue this method. Also I am not experienced with doing renovations to have a well estimated time line for a renovation. Do you have any book or other resources that are focused on college rentals to further my education. Thank you for your time!
I pursed this method on my 1st deal at 21 years old. Have your strategy together and go for it!
A good book is Profit by Investing in Student Housing by Zaransky.