Is student rentals still a good idea?

Question

Hello everyone. First post here, amazing resource.

I've recently closed on a single family home and have taken my first serious step into real estate investing. I'm very new to all this so i'm still really trying to figure out what is my "thing". So many different ways to approach this thing we call real estate investing.

I have a couple real estate agents whom I talk with and i've thought about student housing because i've seen the immense cash flow you can get out of an 8 bedroom unit near a university. It's those kinds of properties that lets you retire financially with only 2 units if you can get it done right.

But both my real estate agent friends are nervous about that prospect. Both state that parents nowadays are actually more interested in renting or even flat out buying condo units to keep their kids safe from reckless teenagers or limit their exposure so that when they come home their chances of accidentally sniping off grandpa are lowered.

This makes me wonder if these types of properties are still worth chasing. The AirBNB market completely blew up with COVID to the point that very successful people who held 15-25 properties essentially went bankrupt within weeks. True, the fear was very fresh and new, so maybe the heat has died down?

I'd like to hear from others who are currently with student housing. Does this still work for you? All the ads for student housing I see now include "Highly Meticulous cleaning services". Some claiming even daily. That's a pretty serious load of overhead. It makes me think that perhaps at this point they're happy to break even or seriously reduce cashflow to keep the property from defaulting.

Thank you for your input and time.

Adam Krawec · Answer

There are no cleaners coming into the homes. It is on the student's to keep things tidy, make a weekly duties list that rotates the students, include it in the lease. Just don't count on them cutting the grass or shoveling the driveway. Make the duties super light, such as, taking out the trash.

I wouldn't say it's business as usual, as the international students are not allowed to immigrate at the moment. So the students that are moving around are already here and looking for better accommodations.

Adam Krawec · Answer

I work with investors that have student housing in Niagara Falls. We have had zero issues filling up a home with 10-12 students in a week.

Being close to jobs and having a clean home were really an advantage. We found that a lot of students were moving out of very poor conditions, and were too far outside the tourist areas for the jobs (when they were a thing).

Andrew R. Lucas · Answer

74% @Will Gaston?!!  Quit showing off :)

@Arif Bor the school and size of student population is what you need to worry about.  How many students attend school vs How much housing the school has on campus.  And how many available units in the town.  Larger student body with smaller town = great college rental market.

Will Gaston · Answer

@Arif Bor what school is this? The location of your investment will help answer the question.

I think the demise of student rentals at is largely overblown. Especially at large state schools. I'm at UofSC in Columbia and we're already 74% leased for the 2021-2022 school year.

Arif Bor · Answer

@Will Gaston

I wasn't really looking for specific areas just yet, I wanted to hear from people who are in this space and seeing if there is any patterns. Are people finding it harder to fill rooms? Do you have to have a daily cleaner come in to attract enough attention? Is it business as usual?

Thank you @Adam Krawec, that's exactly the type of info I wanted to hear more about.

Will Gaston · Answer

@Arif Bor As usual I agree with @Andrew R. Lucas. My experience is that the micro is much more important than the macro in real estate.

"Are student rentals still a good idea?" is not a specific or localized question.

"Are high end student rentals at ____ University in the _____neighborhood still a good idea?" is more likely to get you the answer that will be helpful.

Arif Bor · Answer

I'm in the Niagara falls region in Ontario. The big schools here is Brock University, but i'm not really locked in this area alone. I'm open to travelling or buying out of my region.

Is student rentals still a good idea?

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