New Investor Looking At Rental Property In Clemson, SC

Robert Pisarski · 2020-05-14T00:35:11-07:00

Hey everyone I am new here to the forums, but have been almost religiously watching the BP YouTube channel for quite some time as well as other insightful investment channels. I've been educating myself and preparing to make a move for a while now. After quite a bit of research and consideration I have decided to take the dive into student housing property investment in Clemson, SC. I live in Boiling Springs, SC which is about an hour away from Clemson. From my perspective, which is of course limited due to my lack of actual real estate investment experience, Clemson presents a great opportunity for student housing investment! I would love to hear some advice and insight from anyone who is experienced in student housing investment, especially in the Clemson market!

Cole Oraham

Real Estate Agent · Clemson, SC · Member since 2015 · 56 posts · 35 votes

6y

Hi @Robert Pisarski! That's awesome that you are ready to hop into your first investment. Before starting, please note that this is not advice and advice is only given when there is an agent/client relationship.

I have managed off-campus student housing at Clemson University since January of 2013, and I have been in real estate sales since May of 2015. I love the market and student housing. There's a lot of pros and cons for it, and Clemson (the city) itself is different than surrounding areas (Seneca, Central, Pendleton, etc). The major pro of student housing is that you can lease by the bed and normally are able to charge more than if you leased the entire house. For example, you might be able to rent a 3 bedroom house for $1000/month vs charging a by the bed rate of $400/month. Students look at what their cost is going to be vs what the overall rent amount is. Most students are not able to pass screening by themselves. As a result, you can require a guarantor/co-signer for the lease. While a student might not care about their credit, requiring a guarantor can greatly decrease the chance of delinquency. This also helps when there are damages. The guarantor is still on the hook for repairs.

The main thing that can impact student housing is vacancy. Where in a normal market you don't start marketing a property until just before it is vacant/as it becomes vacant, in student housing you begin leasing in ~October of the year prior to the school year. For example, we started leasing in October of 2019 for August 2020 leases. This coincides with the date that Clemson has for the deadline for their on-campus housing. There are a lot of properties that fill up quickly (the downtown properties are the A-class properties which normally have a 1 year waiting list). Leasing continues through July, but you get a large percentage of your leases before students leave for winter break, right after they return from winter break, and right after they return from Spring Break. If you don't get your property lease for August, there is a pretty high chance that it could sit vacant until the following August. That is where there is a major downside.

Personally, I don't like the numbers for purchasing condos in large communities. It can look very good on paper because the returns look great. The issue there is that you are competing against all of your neighbors with the same floor plan and same features. It makes it kind of luck-of-the-draw for if someone leases your unit vs the neighbor's unit. There are pretty high HOA dues depending on the community as well which can eat into cashflow.

I hope that this all helps! I'm happy to discuss further or help you find your first property! Please feel free to message me and I can send you my contact information. I'd be happy to talk further and answer any other questions you have!

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

6y

Yes, it presents an opportunity. It could also present a problem given today's political nonsense over COVID and the very real threat of virtual school next year. Personally, I would wait it out to see what happens. If COVID stretches this out, you may see a lot of investors unloading properties cheap.

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Dave PoeppelmeierBusiness Member

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

6y

I own Student Housing around University of Toledo, and that's a lot different than how UT works. Our rental season is usually February to May for an August move in. We have 1 straggling house left, likely because of Covid-19, but I'm sure that will get rented here soon. I love working with the college students, especially since I went to UT and can relate to what they're going through right now.

I completely agree with Cole, you need to have co-signers on everything. I also agree with the condos, in that you have to deal with all of the HOA stuff as well. Every University has a different "housing culture", and you should really learn what that is at Clemson before diving in. Good luck!

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Roni E.Pro Member

Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes

6y

I would do your homework and see what is the school's plan for the upcoming semester.

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Sanford Myers

Member since 2019 · 20 posts · 14 votes

6y

Hi Robert,

I actually live in Liberty, SC, just a few minutes from Clemson. I am working on gaining some traction to purchase some rental properties as well. Clemson/Central/Seneca is one of the areas that I am looking. As Cole mentioned, there is a lot of appeal to student housing. But there are also a lot of concerns, my biggest is the damage that students often do to rental property.

I would also point out that Anderson University is right down the road in Anderson, SC (20 minutes from Clemson). It is a smaller private university, but its student population has outgrown the dorm space. The university encourages their juniors and seniors to get off-campus housing so that the freshmen and sophomores can utilize the dorms.

There is a ton of industry moving into the metropolitan Greenville, SC area, which really includes all of the above communities. That said, while student housing within walking/biking distance to campus is often preferred, it is my theory that if you choose one of the bedroom communities nearby, it is still close enough to rent as student housing for students who have cars, but if you don't secure the lease before August as mentioned in Cole's reply, you can still market to other renters. It may be more difficult to rent by the bed that way. But at least you don't have a property sitting empty for months.

As I mentioned earlier, I am just getting started also, but live in the area. I am in Clemson a couple of days a week and am in Greenville at least five days a week. I am looking to network with like-minded investors. So if you have questions, need some local eyes, anything like that, feel free to PM me. I'd love to hear more about you and your plans.

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Joey Hering

Member since 2020 · 3 posts · 0 votes

6y

Hey @Robert Pisarski I'm new to BP and in my

first few weeks of researching real estate as an investment, but I would love talk with you about what you are looking for from an i v editor standpoint and maybe I can share what students are looking for when renting? Let me know if you'd like to connect!

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New Investor Looking At Rental Property In Clemson, SC

New Investor Looking At Rental Property In Clemson, SC

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