Mid-Term/Short-Term Rentals in State College, PA

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

2y

Hey @Christyn Budzyna. So I like the idea of student housing, but I will tell you right now that making it a STR for 4 months a year isn't going to work.

Have you ever seen houses rented to students? You would have to do a bunch of work each time you wanted to convert over.

If you do student housing, I am betting you will get decent occupancy from students over the summer. My son goes to WSU and lives there full time to keep is nice place.

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Ryan Muska

Lender · Saddle Brook, NJ · Member since 2023 · 431 posts · 231 votes

2y

I agree with @Michael Baum

When I was in college, all my friends and classmates rented for a year at a time. Often they would stay in the area and work while school was out.

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Christyn Budzyna

OP

Member since 2017 · 3 posts · 1 vote

2y

Good to know, @Michael Baum what's the level of work you've seen? Would definitely keep it as student housing but the market demand for football season (and the revenue projections) are really good, so it might be worth it to do the extra work...

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Michael BaumPro Member

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

2y

Quote from @Christyn Budzyna:

Good to know, @Michael Baum what's the level of work you've seen? Would definitely keep it as student housing but the market demand for football season (and the revenue projections) are really good, so it might be worth it to do the extra work...

Ok, so I have had 2 kids go through college. Some of the places they loved to live were dumps. Even if you get a decent place, it is quickly degraded. I don't want to say trashed, but they don't clean it well if at all, paint, flooring, doors etc all take a beating.

My son takes pretty decent care of his room in a 4/2 apartment in a basement of an old church. He cleans up after himself, does dishes, toilets etc. The rest of his roommates have been less than stellar.

So doesn't football season correspond with classes in session? I mean college football is going on now as are classes. Would you have it for STR only until end of the NCAA season?

I am a bit confused.

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Christyn Budzyna

OP

Member since 2017 · 3 posts · 1 vote

2y

Yeah, my hope would be to have a group in there from January - August (spring semester & summer), and then Airbnb it out from September - December. Maybe with the wear and tear on the house, I'll need a buffer period to fix things up though.

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Michael BaumPro Member

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

2y

Quote from @Christyn Budzyna:

Yeah, my hope would be to have a group in there from January - August (spring semester & summer), and then Airbnb it out from September - December. Maybe with the wear and tear on the house, I'll need a buffer period to fix things up though.

So I don't see that working at all really. The vast majority of students need housing from Aug/Sept to May/Jun. Then they go home or they stay and work or do a summer semester.

Once a student has place they like off campus, they will stick with it.

I hate to be a downer here, but you need to pick one or the other and I think that student housing would be the way to go here seeing as there are restrictions on STRs.

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Dave PoeppelmeierBusiness Member

Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes

2y

Quote from @Christyn Budzyna:

Hi everyone,

I'm a long-time reader and first-time poster here on the Bigger Pockets forums. I've been managing mid-term and short-term rentals for a little over a year through co-hosting and arbitrage, but looking to make my first purchase in 2024.

I live in New York, but have been curious about the State College, PA market. I've spent some time there working on projects through Penn State, so I have a basic working knowledge of the area.

I'm aware that new regulations are in place for short-term rentals in State College, including a limit to 120 days per year, a parking spot for each bedroom, and a tenant designating it as their primary residence for 8 months out of the year.

With these rules in place, I'm considering purchasing a property to rent as student housing (mid-term rental) for 8 months out of the year, and using it as a short term rental for the other 4 months a year (ideally, football season).

I'm curious if anyone else has invested and/or used this strategy in the area? Any other helpful knowledge when it comes to the State College, PA market?

Thanks in advance!

- Christyn

Hi Christyn, unfortunately I'm going to join in the Debbie Downer parade. I do Student Rentals at The University of Toledo, and although it's different at every college, you either have to do Student Rentals or STR, not both. No student is going to go for a lease for only the Winter/Spring/Summer so you can do STR for the football games. Now, at a big school like Penn State, you might have enough demand for STR for the football season as well as for visiting professors/contractors/etc the rest of the year, but obviously you'll have to do your homework on the rest of those options.

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Alan AsriantsBusiness Member

Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes

2y

I went to PSU, most students are in school during football season. Would be tough to find a student that needs it only for those 8 months.

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Sarah KensingerPro Member

Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes

2y

Would you be able to find a property just outside city limits that would not fall under the regulations? If it's close enough to State College, people might be interested in staying there for games and maybe even to visit children in college.

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Jillian ShulerPro Member

Member since 2019 · 17 posts · 8 votes

2y

Hi Christyn. I am in the same boat when it comes to wracking my brain about a purchase in State College. I went to Penn State and attend every home football game. We have a family home in State College we do not rent. Would love to own a STR but it won't work in the Borough I don't believe. They are ridiculous with their regulations. Surrounding areas aren't solid on their ordinances yet I don't believe, so could change at anytime. I haven't sat down and called surrounding townships to ask, but maybe that's your best bet. When I have some spare time, it's in my to do list.

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Josh Parra

Investor, Wholesaler · State College, PA · Member since 2013 · 61 posts · 41 votes

2y

Hi @Christyn Budzyna

I own property here in State College Borough, some of which are standard rentals and some STR. We actually thought about doing what you suggested for the 8 month term and STR for football season as a way around the new restrictions. It could be a good option but you couldn't rent it to students unless you had a Student Rental Permit which they don't issue anymore. You'd have to acquire a home that already has a student rental permit in place but even then, as some others have stated, the students are here year round so an 8 month lease wouldn't work. Also, the abuse student housing takes would be a pain to maintain especially if using for an STR. We have a couple student rental properties and keep the student permits active for resale but don't rent to students.

There is a great rental market outside of students so getting someone in there for only 8 months is an option especially with it being a cute furnished rental. Another local real estate investor actually suggested getting contracts/leases signed with companies that have traveling nurses. Even with that you'd still have to make sure you have the proper documentation showing the long term lease and there is no telling how picky the Borough will get. We had to jump through hoops for our permits which I will explain next.

So at the moment we have 3 STR's in the Borough. Our strategy was purchasing single family homes with an inlaw suite or attached apartment, or the ability to create one. Since it's all in the same structure, we rent out the house to long term tenants with the understanding that the attached unit will be used as an Airbnb and we let STR guests know that the rest of the home is completely separate and occupied. We also flip flop this strategy and have a property with a long term tenant in the smaller unit and we rent out the main house as an STR. When applying for permits we had to show proof of the lease, copies of the tenants drivers license, tenant bills with address etc. as well as proof of parking spots with illustrations and google map images. Obviously we also had to make sure the home was up to rental permit standards. One of these properties has actually been rented to parents that use it for events and to visit their Penn State student. The Borough actually made them go in and sign an affidavit confirming their lease and use of the space. Nonetheless we went through all of the red tape and received the permit. Should the regulations change where we have to stop STR, we can rent out the former STR's as long term rentals.

If you want to avoid all of this the best option is to find something in a surrounding township in an area like Park Forest or Toftrees. At the moment, I believe there are no restrictions but that can change in the future. My suggestion would be to make sure that you have an exit strategy in place if the STR regulations were to change. Make sure your investment would work as either an STR or long term rental. We charge a premium for our SF rentals because we put in the effort and make them look good. The majority of rentals in the area are just okay so if you can make yours look cute so that it stands out from the rest you can get more for rent plus you'll attract better tenants.

If you have any questions please feel free to reach out. I'm also a Real Estate Broker so I am very familiar with the market here. Hope this helps! :)

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Mid-Term/Short-Term Rentals in State College, PA

Mid-Term/Short-Term Rentals in State College, PA

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