Updated almost 4 years ago on . Most recent reply
UNR Student Rental Market Questions
Hello BiggerPockets Forum,
My business partner and I are first-time investors and would appreciate a reality check on our strategy. We are targeting SFH in a 1 -3 mile radius of UNR campus. We want between 3-5 tenants under a single lease. We are NOT pursuing rent by the door. We are working with a 20% downpayment at 4% interest for 30 yrs. We are looking at larger 3BD/2BA for opportunities to convert extra rooms/finished basements/garages into extra beds/baths.
We noticed if the rent is about 0.5% of the total property value, we will be about breakeven for pure cashflow at the following assumptions using BP's Rental Calculator (e.g., $500k property requires ~$2500 rental income to breakeven):
5% CAPEX, 5% vacancy, 5% repairs/maintenance, and 8% property management (we have something worked out with our property manager)
Here are our questions:
-Would ~$600/room be a competitive rate? (4 rooms @ $2.4k or 5 rooms @ $2.75k).
-How competitive is our strategy in today's market? We are targeting a CF of $400-600.
-What neighborhoods in the UNR area should we steer clear of? We've heard specific neighborhoods are rougher.
-Is there a market for 3-5 person tenant arrangements under a single lease besides students? In the event, it is too late to capitalize on the upcoming school semester.
We appreciate any advice or insight. Thank you.