I know there are many people coming up with creative ways to generate cash flow on real estate. I also know in many areas there is a huge demand for space, where maybe someone cannot afford to rent an apartment, etc. on their own. Some of these:
- Senior housing - Where rooms are rented to seniors that are able to live on their own, but are too young for retirement homes, but like the company of others. (not assisted living where medical care is needed)
- College Students - Can't afford to live on their own, but don't want to be in dorms
- Sober living houses - Women or men in a life transitional stage (having been involved with drugs, alcohol, or prison) renting room space.
Do you own, or have you owned such properties? What advice would you give others considering starting such a venture?
I have college rentals and sober living/transitional houses both.
As far as sober living, I would recommend it if you get affiliated with someone that can steer tenants your way. I'm connected with someone at a local substance abuse treatment center that does all the placement of tenants. Without him, I'm not sure how I would ever get tenants. I also got connected with someone at DOC (dept of corrections) that places just released inmates, who have to stay in transitional housing as part of their release.
Im not sure how someone would do it without the affiliations though.
Student housing I highly recommend. On a 4 BDRM, if I rent out to a family, I might get $850-$900. But with students, I get more like $350 a BDRM. I also very rarely chase money since Mom and Dad are usually paying the rent. They might be a little harder on my units, but nothing the deposit never covers.
@Joseph Sherer I'm always thinking! I have a sister that rents rooms to women in sober living and/or women coming out of abusive situations, and some that just are down on their luck. They pay around 450-500 per room. My sister has good relationships with many different non profits that refer women to her, but not enough space to put them in.
I know too that there are many people on fixed incomes of some sort; and there needs to be creative options for them to obtain housing. Many of them have no problems other than they can't afford rent, utilities, etc. on their own. Many are single moms, and there just are not any good options.
I'm actually toying with the idea of developing some properties specifically for such uses, that way they could be designed specifically to accommodate communal living. Has anyone done anything like that?
@Rob Bowling ^^ meant to @mention you there too.
Yes. Working with my son in Florida, we have several sober living houses as son is in that community. We started with his house (he rents from us, pays us $300 over the mtg and then basically lives for free with rental from the other rooms. He made an 1800 sq ft 3/2 into a 4/2). We have two others, the last was 4/2 that we bought specifically because it could be made into 5/2. He is very good at managing and because he is in the community the word gets out and there is no shortage of guys looking for a place to live. That said, I wouldn't do it without him because these guys are in recovery and they relapse and they cannot stay if they aren't clean and sober. Two of the houses are very stable, and 4 rooms in the newest are stable but the 5th has been a revolving door in the past month. This is not a niche for the faint of heart. Son does really well because you can't snow the snowman, so to speak.
All that said - I'd love to trade info with you on what your sister is doing and how she got into that niche as that is one I'd like to work on myself.
I do not have a defined Senior Housing but I do have one property that is adult only and I target seniors. They are the absolute easiest and most reliable of all tenant groups to have. Screening is still necessary but over all the best quality tenants. High credit scores, stable income, quiet and friendly. My tenants are primarily middle to lower middle class, no welfare. Welfare recipients have social and attitude issues that do not mix with normal tenants. They are a pain to manage.
If I were to expand my investing I would be in Senior housing and anything death related for the next 30 years.
Originally posted by @Thomas S. :
...If I were to expand my investing I would be in Senior housing and anything death related for the next 30 years.
I agree with your strategy Greg, and so do the demographics.
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