Hello i am just starting out in real estate. I would ideally like to get a 4-8 unit complex and rent out individual apartments but if i have to start with just a 4 bedroom home that is fine.
My question is have heard Richmond becomes a ghost town in the summer when the college kids leave. Should i be alarmed by this. Is it a good idea to invest in a college summer ghost town?
I can attest. This is true, or at least it was when I went in 2007-2009. Hope this helps. Have you been to Richmond? Be careful, the lines between good and bad neighborhoods are very sharp... Most properties in "the Fan" should be good to go.
Maybe I am too close to the Forrest to see the trees but I don't think richmond is a ghost town by any stretch. It is a large growing city with a rapidly growing metro area. Vcu has 30k+ students but a lot of them live in richmond and are there year round. If your renting to college kids you will have more churn than with non students but that is the case everywhere. There really aren't many/any bad neighborhoods close to campus anymore. If you go north over the bridge it gets rough and I would avoid that area. The areas south east and west are all a lot more good than bad and getting more expensive by the month.
Thank you for your comments. I have visited. My current room mate lived there for 3 years and said in the summer everyone leaves. Here in Virginia Beach it is a ghost town in the winter compared to the summer. Thats what he meant. Its much more populated in the winter. But as long as some stay year round thats all i need.
As far as what are the good neighborhoods. You said north of the bridge? Is randolph or maymont still good? I looked at the prices of the neighbor homes and they are lowish.
I am aiming for fixer upper in prime spot. I cant find one exactly on the main drag for under 100k but as long as its within walking distance it fits the culture i want. Do you think this is a smart investment?
I found myself becoming attached to the house im in right now simply because i like running on the boardwalk. THats what i aim to do for the tennants. Give them a cultured place to love. Put up a fence, a big garden, hammocks, give it like a resort feel. Finding a multi unit place for cheap is not easy tho.
As a recent graduate, I can assure you that college students will pay for year-long leases regardless of the school session. If you have a place that is nearby, convenient, or "luxurious," students will pay for it.
Thank you John. As a former student, as you think that location in the link posted above is convenient? Its not luxurious yet haha.
The link to the property above is not active on the mls. Don't count on zillow to find properties especially for multifamily. Usually the good deals are gone very fast. To get a current list of active listings you need to look at the MLS or contact a realtor to set you up with the listings.
I looked around the 32st area a few weeks back and it wasn't for me. The good deals I found seemed to be tear downs eventually with bad foundations and uneven floors. Most were built in the 1900-1940, that's not really what im looking for as a buy and hold investor. It's definitely not a great area but it can still bring in rent.
I hope you find something good!
One thought is if you are targeting college students as your potential tenants - you don't necessarily need a multi-family property. A 4 bedroom/2 Ba house would house 4 tenants. If your location and property is desirable enough - your vacancies should be similar to other properties.
I would probably target Norfolk instead of Richmond since it's closer to you and will probably fetch a higher rent and be easier to manage. Sometimes you see SFHs or MFHs near downtown, the zoo, ODU and the naval base in the 20-50k range and many are not in terrible shape.
I used to run the marketing and leasing efforts for two large multi-family units on and near the VCU campus. This was by far one of the better performing college towns the group of investors I worked for had. In fact, a primary investor on those assets is still there. (The Chesterfield and Stuart Court buildings). I won't lie and tell you that before we had the right management team there, leasing in the summer months was difficult. Eventually, we figured out different tactics to keep long-term leases, some that included discounted rent in the summer months, and offering 'storage' rates so students would keep the residence while at home. The best tactic was to offer leases for 2 and 3 years (the duration of their schooling) with the promise of no increase. We took the rent up to what we anticipated the market would have and billed that.
When setting the rent rates for a property in a college town you just need to factor in your cash flow for a summer loss. Using systems like Rainmaker LRO are helpful for this.
All in all - if you have the right location this is a great area to be in. I am a huge fan of multi-family investments in a college town. The summer will prove difficult but if you create the urgency, students will stay for a 12 and 24 month lease.
IMHO, and I'm no expert on the market, but under 100k you will not be looking at student housing for VCU that is walking distance to anything. There is a possibility for under $100k around Virginia Union University, but still probably a tough go.
Hi Morgan -- there are students who will go as far away as the property you are looking at, but that area is not considered "near VCU". It would require driving to the main campus area and parking there is pretty dreadful. Another thing though that would be even more of a concern to me is that the property is only about 1800 sq ft and is divided into four one bedroom apartments. So those individual units are going to be quite small. You would only be able to market to people who want their own small private space. That may not be the "hang out on the porch with your neighbors" crowd that you envision attracting. Finally, it doesn't look like anyone has lived there for several years. The current owners bought it in 2012, live in Texas, and obviously haven't been able to make a go of it.
I think the people assuming richmond is a college town are making a mistake. Downtown richmond has a very large college but it also has a large amount of commuter students. Meaning the students live in the richmond area. You can find all kinds of people to rent there. What you won't find is cheap housing that cash flows. Everything there has gotten expensive if you do find something cheap it will need a lot of work. Even the area near carver at james and Catherine streets have gotten expensive and those aren't traditional student areas.
I've lived in Richmond for 7 years and I agree with Matt. It's not a ghost town by any stretch in the summer. There's 1.2 million people in the greater Richmond metro market and VCU has an impact on the immediate campus but the fan and surrounding areas are stable.
Also... the house you linked is in Church Hill. The southern streets have definitely gentrified over the past few years and there are some sections that are great. The area where the property is located is pretty rough. If you scroll a little to the east you'll see Creighton road. That's where the housing project Creighton Heights is located.
Hope that helps.
richmond is definitely not sleepy in the summer. Vcu is 30k, but not everyone leaves. Rihmond is around 200k with greater area being over 1 million.
Also extremely hot market right now, that is much more your problem
Do you think this quality of this neighborhood is improving? I want a place to renovate and I plan on living there as I need to be out of my current house by August 31st. My landlord wants to renovate this place so my time line has shortened.
I don't mind doing the 4 bd house. I just had a vision for this place but if the neighborhood is that bad and that far away from the college I don't think it is right. I looked to me in biking distance though.
My husband and I live in Virginia Beach. my husband grew up here and has worked building homes in many of the neighborhoods. let us know how we can help.